WSJ_23.words

No
,
it
was
n't
Black
Monday
.

But
while
the
New
York
Stock
Exchange
did
n't
fall
apart
Friday
as
the
Dow
Jones
Industrial
Average
plunged
190.58
points
--
most
of
it
in
the
final
hour
--
it
barely
managed
to
stay
this
side
of
chaos
.

Some
``
circuit
breakers
''
installed
after
the
October
1987
crash
failed
their
first
test
,
traders
say
,
unable
to
cool
the
selling
panic
in
both
stocks
and
futures
.

The
49
stock
specialist
firms
on
the
Big
Board
floor
--
the
buyers
and
sellers
of
last
resort
who
were
criticized
after
the
1987
crash
--
once
again
could
n't
handle
the
selling
pressure
.

Big
investment
banks
refused
to
step
up
to
the
plate
to
support
the
beleaguered
floor
traders
by
buying
big
blocks
of
stock
,
traders
say
.

Heavy
selling
of
Standard
&
Poor
's
500-stock
index
futures
in
Chicago
relentlessly
beat
stocks
downward
.

Seven
Big
Board
stocks
--
UAL
,
AMR
,
BankAmerica
,
Walt
Disney
,
Capital
Cities\/ABC
,
Philip
Morris
and
Pacific
Telesis
Group
--
stopped
trading
and
never
resumed
.

The
finger-pointing
has
already
begun
.

``
The
equity
market
was
illiquid
.

Once
again
{
the
specialists
}
were
not
able
to
handle
the
imbalances
on
the
floor
of
the
New
York
Stock
Exchange
,
''
said
Christopher
Pedersen
,
senior
vice
president
at
Twenty-First
Securities
Corp
.

Countered
James
Maguire
,
chairman
of
specialists
Henderson
Brothers
Inc.
:
``
It
is
easy
to
say
the
specialist
is
n't
doing
his
job
.

When
the
dollar
is
in
a
free-fall
,
even
central
banks
ca
n't
stop
it
.

Speculators
are
calling
for
a
degree
of
liquidity
that
is
not
there
in
the
market
.
''

Many
money
managers
and
some
traders
had
already
left
their
offices
early
Friday
afternoon
on
a
warm
autumn
day
--
because
the
stock
market
was
so
quiet
.

Then
in
a
lightning
plunge
,
the
Dow
Jones
industrials
in
barely
an
hour
surrendered
about
a
third
of
their
gains
this
year
,
chalking
up
a
190.58-point
,
or
6.9
%
,
loss
on
the
day
in
gargantuan
trading
volume
.

Final-hour
trading
accelerated
to
108.1
million
shares
,
a
record
for
the
Big
Board
.

At
the
end
of
the
day
,
251.2
million
shares
were
traded
.

The
Dow
Jones
industrials
closed
at
2569.26
.

The
Dow
's
decline
was
second
in
point
terms
only
to
the
508-point
Black
Monday
crash
that
occurred
Oct.
19
,
1987
.

In
percentage
terms
,
however
,
the
Dow
's
dive
was
the
12th-worst
ever
and
the
sharpest
since
the
market
fell
156.83
,
or
8
%
,
a
week
after
Black
Monday
.

The
Dow
fell
22.6
%
on
Black
Monday
.

Shares
of
UAL
,
the
parent
of
United
Airlines
,
were
extremely
active
all
day
Friday
,
reacting
to
news
and
rumors
about
the
proposed
$
6.79
billion
buy-out
of
the
airline
by
an
employee-management
group
.

Wall
Street
's
takeover-stock
speculators
,
or
``
risk
arbitragers
,
''
had
placed
unusually
large
bets
that
a
takeover
would
succeed
and
UAL
stock
would
rise
.

At
2:43
p.m.
EDT
,
came
the
sickening
news
:
The
Big
Board
was
halting
trading
in
UAL
,
``
pending
news
.
''

On
the
exchange
floor
,
``
as
soon
as
UAL
stopped
trading
,
we
braced
for
a
panic
,
''
said
one
top
floor
trader
.

Several
traders
could
be
seen
shaking
their
heads
when
the
news
flashed
.

For
weeks
,
the
market
had
been
nervous
about
takeovers
,
after
Campeau
Corp.
's
cash
crunch
spurred
concern
about
the
prospects
for
future
highly
leveraged
takeovers
.

And
10
minutes
after
the
UAL
trading
halt
came
news
that
the
UAL
group
could
n't
get
financing
for
its
bid
.

At
this
point
,
the
Dow
was
down
about
35
points
.

The
market
crumbled
.

Arbitragers
could
n't
dump
their
UAL
stock
--
but
they
rid
themselves
of
nearly
every
``
rumor
''
stock
they
had
.

For
example
,
their
selling
caused
trading
halts
to
be
declared
in
USAir
Group
,
which
closed
down
3
7\/8
to
41
1\/2
,
Delta
Air
Lines
,
which
fell
7
3\/4
to
69
1\/4
,
and
Philips
Industries
,
which
sank
3
to
21
1\/2
.

These
stocks
eventually
reopened
.

But
as
panic
spread
,
speculators
began
to
sell
blue-chip
stocks
such
as
Philip
Morris
and
International
Business
Machines
to
offset
their
losses
.

When
trading
was
halted
in
Philip
Morris
,
the
stock
was
trading
at
41
,
down
3
3\/8
,
while
IBM
closed
5
5\/8
lower
at
102
.

Selling
snowballed
because
of
waves
of
automatic
``
stop-loss
''
orders
,
which
are
triggered
by
computer
when
prices
fall
to
certain
levels
.

Most
of
the
stock
selling
pressure
came
from
Wall
Street
professionals
,
including
computer-guided
program
traders
.

Traders
said
most
of
their
major
institutional
investors
,
on
the
other
hand
,
sat
tight
.

Now
,
at
3:07
,
one
of
the
market
's
post-crash
``
reforms
''
took
hold
as
the
S&P
500
futures
contract
had
plunged
12
points
,
equivalent
to
around
a
100-point
drop
in
the
Dow
industrials
.

Under
an
agreement
signed
by
the
Big
Board
and
the
Chicago
Mercantile
Exchange
,
trading
was
temporarily
halted
in
Chicago
.

After
the
trading
halt
in
the
S&P
500
pit
in
Chicago
,
waves
of
selling
continued
to
hit
stocks
themselves
on
the
Big
Board
,
and
specialists
continued
to
notch
prices
down
.

As
a
result
,
the
link
between
the
futures
and
stock
markets
ripped
apart
.

Without
the
guidepost
of
stock-index
futures
--
the
barometer
of
where
traders
think
the
overall
stock
market
is
headed
--
many
traders
were
afraid
to
trust
stock
prices
quoted
on
the
Big
Board
.

The
futures
halt
was
even
assailed
by
Big
Board
floor
traders
.

``
It
screwed
things
up
,
''
said
one
major
specialist
.

This
confusion
effectively
halted
one
form
of
program
trading
,
stock
index
arbitrage
,
that
closely
links
the
futures
and
stock
markets
,
and
has
been
blamed
by
some
for
the
market
's
big
swings
.

(
In
a
stock-index
arbitrage
sell
program
,
traders
buy
or
sell
big
baskets
of
stocks
and
offset
the
trade
in
futures
to
lock
in
a
price
difference
.
)

``
When
the
airline
information
came
through
,
it
cracked
every
model
we
had
for
the
marketplace
,
''
said
a
managing
director
at
one
of
the
largest
program-trading
firms
.

``
We
did
n't
even
get
a
chance
to
do
the
programs
we
wanted
to
do
.
''

But
stocks
kept
falling
.

The
Dow
industrials
were
down
55
points
at
3
p.m.
before
the
futures-trading
halt
.

At
3:30
p.m.
,
at
the
end
of
the
``
cooling
off
''
period
,
the
average
was
down
114.76
points
.

Meanwhile
,
during
the
the
S&P
trading
halt
,
S&P
futures
sell
orders
began
piling
up
,
while
stocks
in
New
York
kept
falling
sharply
.

Big
Board
Chairman
John
J.
Phelan
said
yesterday
the
circuit
breaker
``
worked
well
mechanically
.

I
just
think
it
's
nonproductive
at
this
point
to
get
into
a
debate
if
index
arbitrage
would
have
helped
or
hurt
things
.
''

Under
another
post-crash
system
,
Big
Board
President
Richard
Grasso
(
Mr.
Phelan
was
flying
to
Bangkok
as
the
market
was
falling
)
was
talking
on
an
``
inter-exchange
hot
line
''
to
the
other
exchanges
,
the
Securities
and
Exchange
Commission
and
the
Federal
Reserve
Board
.

He
camped
out
at
a
high-tech
nerve
center
on
the
floor
of
the
Big
Board
,
where
he
could
watch
updates
on
prices
and
pending
stock
orders
.

At
about
3:30
p.m.
EDT
,
S&P
futures
resumed
trading
,
and
for
a
brief
time
the
futures
and
stock
markets
started
to
come
back
in
line
.

Buyers
stepped
in
to
the
futures
pit
.

But
the
build-up
of
S&P
futures
sell
orders
weighed
on
the
market
,
and
the
link
with
stocks
began
to
fray
again
.

At
about
3:45
,
the
S&P
market
careened
to
still
another
limit
,
of
30
points
down
,
and
trading
was
locked
again
.

Futures
traders
say
the
S&P
was
signaling
that
the
Dow
could
fall
as
much
as
200
points
.

During
this
time
,
small
investors
began
ringing
their
brokers
,
wondering
whether
another
crash
had
begun
.

At
Prudential-Bache
Securities
Inc.
,
which
is
trying
to
cater
to
small
investors
,
some
demoralized
brokers
thought
this
would
be
the
final
confidence-crusher
.

That
's
when
George
L.
Ball
,
chairman
of
the
Prudential
Insurance
Co.
of
America
unit
,
took
to
the
internal
intercom
system
to
declare
that
the
plunge
was
only
``
mechanical
.
''

``
I
have
a
hunch
that
this
particular
decline
today
is
something
`
more
ado
about
less
.
'

It
would
be
my
inclination
to
advise
clients
not
to
sell
,
to
look
for
an
opportunity
to
buy
,
''
Mr.
Ball
told
the
brokers
.

At
Merrill
Lynch
&
Co.
,
the
nation
's
biggest
brokerage
firm
,
a
news
release
was
prepared
headlined
``
Merrill
Lynch
Comments
on
Market
Drop
.
''

The
release
cautioned
that
``
there
are
significant
differences
between
the
current
environment
and
that
of
October
1987
''
and
that
there
are
still
``
attractive
investment
opportunities
''
in
the
stock
market
.

However
,
Jeffrey
B.
Lane
,
president
of
Shearson
Lehman
Hutton
Inc.
,
said
that
Friday
's
plunge
is
``
going
to
set
back
''
relations
with
customers
,
``
because
it
reinforces
the
concern
of
volatility
.

And
I
think
a
lot
of
people
will
harp
on
program
trading
.

It
's
going
to
bring
the
debate
right
back
to
the
forefront
.
''

As
the
Dow
average
ground
to
its
final
190.58
loss
Friday
,
the
S&P
pit
stayed
locked
at
its
30-point
trading
limit
.

Jeffrey
Yass
of
program
trader
Susquehanna
Investment
Group
said
2,000
S&P
contracts
were
for
sale
on
the
close
,
the
equivalent
of
$
330
million
in
stock
.

But
there
were
no
buyers
.

While
Friday
's
debacle
involved
mainly
professional
traders
rather
than
investors
,
it
left
the
market
vulnerable
to
continued
selling
this
morning
,
traders
said
.

Stock-index
futures
contracts
settled
at
much
lower
prices
than
indexes
of
the
stock
market
itself
.

At
those
levels
,
stocks
are
set
up
to
be
hammered
by
index
arbitragers
,
who
lock
in
profits
by
buying
futures
when
futures
prices
fall
,
and
simultaneously
sell
off
stocks
.

But
nobody
knows
at
what
level
the
futures
and
stocks
will
open
today
.

The
de-linkage
between
the
stock
and
futures
markets
Friday
will
undoubtedly
cause
renewed
debate
about
whether
Wall
Street
is
properly
prepared
for
another
crash
situation
.

The
Big
Board
's
Mr.
Grasso
said
,
``
Our
systemic
performance
was
good
.
''

But
the
exchange
will
``
look
at
the
performance
of
all
specialists
in
all
stocks
.

Obviously
we
'll
take
a
close
look
at
any
situation
in
which
we
think
the
dealer-community
obligations
were
n't
met
,
''
he
said
.

(
See
related
story
:
``
Fed
Ready
to
Inject
Big
Funds
''
--
WSJ
Oct.
16
,
1989
)

But
specialists
complain
privately
that
just
as
in
the
1987
crash
,
the
``
upstairs
''
firms
--
big
investment
banks
that
support
the
market
by
trading
big
blocks
of
stock
--
stayed
on
the
sidelines
during
Friday
's
blood-letting
.

Mr.
Phelan
said
,
``
It
will
take
another
day
or
two
''
to
analyze
who
was
buying
and
selling
Friday
.

Concerning
your
Sept.
21
page-one
article
on
Prince
Charles
and
the
leeches
:
It
's
a
few
hundred
years
since
England
has
been
a
kingdom
.

It
's
now
the
United
Kingdom
of
Great
Britain
and
Northern
Ireland
,
comprising
Wales
,
Northern
Ireland
,
Scotland
,
and
...
oh
yes
,
England
,
too
.

Just
thought
you
'd
like
to
know
.

George
Morton

Ports
of
Call
Inc.
reached
agreements
to
sell
its
remaining
seven
aircraft
to
buyers
that
were
n't
disclosed
.

The
agreements
bring
to
a
total
of
nine
the
number
of
planes
the
travel
company
has
sold
this
year
as
part
of
a
restructuring
.

The
company
said
a
portion
of
the
$
32
million
realized
from
the
sales
will
be
used
to
repay
its
bank
debt
and
other
obligations
resulting
from
the
currently
suspended
air-charter
operations
.

Earlier
the
company
announced
it
would
sell
its
aging
fleet
of
Boeing
Co.
707s
because
of
increasing
maintenance
costs
.

A
consortium
of
private
investors
operating
as
LJH
Funding
Co.
said
it
has
made
a
$
409
million
cash
bid
for
most
of
L.J.
Hooker
Corp.
's
real-estate
and
shopping-center
holdings
.

The
$
409
million
bid
includes
the
assumption
of
an
estimated
$
300
million
in
secured
liabilities
on
those
properties
,
according
to
those
making
the
bid
.

The
group
is
led
by
Jay
Shidler
,
chief
executive
officer
of
Shidler
Investment
Corp.
in
Honolulu
,
and
A.
Boyd
Simpson
,
chief
executive
of
the
Atlanta-based
Simpson
Organization
Inc
.

Mr.
Shidler
's
company
specializes
in
commercial
real-estate
investment
and
claims
to
have
$
1
billion
in
assets
;
Mr.
Simpson
is
a
developer
and
a
former
senior
executive
of
L.J.
Hooker
.

``
The
assets
are
good
,
but
they
require
more
money
and
management
''
than
can
be
provided
in
L.J.
Hooker
's
current
situation
,
said
Mr.
Simpson
in
an
interview
.
``

Hooker
's
philosophy
was
to
build
and
sell
.

We
want
to
build
and
hold
.
''

L.J.
Hooker
,
based
in
Atlanta
,
is
operating
with
protection
from
its
creditors
under
Chapter
11
of
the
U.S.
Bankruptcy
Code
.

Its
parent
company
,
Hooker
Corp.
of
Sydney
,
Australia
,
is
currently
being
managed
by
a
court-appointed
provisional
liquidator
.

Sanford
Sigoloff
,
chief
executive
of
L.J.
Hooker
,
said
yesterday
in
a
statement
that
he
has
not
yet
seen
the
bid
but
that
he
would
review
it
and
bring
it
to
the
attention
of
the
creditors
committee
.

The
$
409
million
bid
is
estimated
by
Mr.
Simpson
as
representing
75
%
of
the
value
of
all
Hooker
real-estate
holdings
in
the
U.S.
.

Not
included
in
the
bid
are
Bonwit
Teller
or
B.
Altman
&
Co.
,
L.J.
Hooker
's
department-store
chains
.

The
offer
covers
the
massive
1.8
million-square-foot
Forest
Fair
Mall
in
Cincinnati
,
the
800,000
square-foot
Richland
Fashion
Mall
in
Columbia
,
S.C.
,
and
the
700,000
square-foot
Thornton
Town
Center
mall
in
Thornton
,
Colo
.

The
Thornton
mall
opened
Sept.
19
with
a
Bigg
's
hypermarket
as
its
anchor
;
the
Columbia
mall
is
expected
to
open
Nov.
15
.

Other
Hooker
properties
included
are
a
20-story
office
tower
in
midtown
Atlanta
,
expected
to
be
completed
next
February
;
vacant
land
sites
in
Florida
and
Ohio
;
L.J.
Hooker
International
,
the
commercial
real-estate
brokerage
company
that
once
did
business
as
Merrill
Lynch
Commercial
Real
Estate
,
plus
other
shopping
centers
.

The
consortium
was
put
together
by
Hoare
Govett
,
the
London-based
investment
banking
company
that
is
a
subsidiary
of
Security
Pacific
Corp
.

``
We
do
n't
anticipate
any
problems
in
raising
the
funding
for
the
bid
,
''
said
Allan
Campbell
,
the
head
of
mergers
and
acquisitions
at
Hoare
Govett
,
in
an
interview
.

Hoare
Govett
is
acting
as
the
consortium
's
investment
bankers
.

According
to
people
familiar
with
the
consortium
,
the
bid
was
code-named
Project
Klute
,
a
reference
to
the
film
``
Klute
''
in
which
a
prostitute
played
by
actress
Jane
Fonda
is
saved
from
a
psychotic
businessman
by
a
police
officer
named
John
Klute
.

L.J.
Hooker
was
a
small
home-building
company
based
in
Atlanta
in
1979
when
Mr.
Simpson
was
hired
to
push
it
into
commercial
development
.

The
company
grew
modestly
until
1986
,
when
a
majority
position
in
Hooker
Corp.
was
acquired
by
Australian
developer
George
Herscu
,
currently
Hooker
's
chairman
.

Mr.
Herscu
proceeded
to
launch
an
ambitious
,
but
ill-fated
,
$
1
billion
acquisition
binge
that
included
Bonwit
Teller
and
B.
Altman
&
Co.
,
as
well
as
majority
positions
in
Merksamer
Jewelers
,
a
Sacramento
chain
;
Sakowitz
Inc.
,
the
Houston-based
retailer
,
and
Parisian
Inc.
,
the
Southeast
department-store
chain
.

Eventually
Mr.
Simpson
and
Mr.
Herscu
had
a
falling
out
over
the
direction
of
the
company
,
and
Mr.
Simpson
said
he
resigned
in
1988
.

Since
then
,
Hooker
Corp.
has
sold
its
interest
in
the
Parisian
chain
back
to
Parisian
's
management
and
is
currently
attempting
to
sell
the
B.
Altman
&
Co.
chain
.

In
addition
,
Robert
Sakowitz
,
chief
executive
of
the
Sakowitz
chain
,
is
seeking
funds
to
buy
out
the
Hooker
interest
in
his
company
.

The
Merksamer
chain
is
currently
being
offered
for
sale
by
First
Boston
Corp
.

Reached
in
Honolulu
,
Mr.
Shidler
said
that
he
believes
the
various
Hooker
malls
can
become
profitable
with
new
management
.

``
These
are
n't
mature
assets
,
but
they
have
the
potential
to
be
so
,
''
said
Mr.
Shidler
.

``
Managed
properly
,
and
with
a
long-term
outlook
,
these
can
become
investment-grade
quality
properties
.

Canadian
steel-ingot
production
totaled
291,890
metric
tons
in
the
week
ended
Oct.
7
,
up
14.8
%
from
the
preceding
week
's
total
of
254,280
tons
,
Statistics
Canada
,
a
federal
agency
,
said
.

The
week
's
total
was
up
6.2
%
from
274,963
tons
a
year
earlier
.

The
year-to-date
total
was
12,006,883
tons
,
up
7.8
%
from
11,141,711
tons
a
year
earlier
.

The
Treasury
plans
to
raise
$
175
million
in
new
cash
Thursday
by
selling
about
$
9.75
billion
of
52-week
bills
and
redeeming
$
9.58
billion
of
maturing
bills
.

The
bills
will
be
dated
Oct.
26
and
will
mature
Oct.
25
,
1990
.

They
will
be
available
in
minimum
denominations
of
$
10,000
.

Bids
must
be
received
by
1
p.m.
EDT
Thursday
at
the
Treasury
or
at
Federal
Reserve
banks
or
branches
.

As
small
investors
peppered
their
mutual
funds
with
phone
calls
over
the
weekend
,
big
fund
managers
said
they
have
a
strong
defense
against
any
wave
of
withdrawals
:
cash
.

Unlike
the
weekend
before
Black
Monday
,
the
funds
were
n't
swamped
with
heavy
withdrawal
requests
.

And
many
fund
managers
have
built
up
cash
levels
and
say
they
will
be
buying
stock
this
week
.

At
Fidelity
Investments
,
the
nation
's
largest
fund
company
,
telephone
volume
was
up
sharply
,
but
it
was
still
at
just
half
the
level
of
the
weekend
preceding
Black
Monday
in
1987
.

The
Boston
firm
said
stock-fund
redemptions
were
running
at
less
than
one-third
the
level
two
years
ago
.

As
of
yesterday
afternoon
,
the
redemptions
represented
less
than
15
%
of
the
total
cash
position
of
about
$
2
billion
of
Fidelity
's
stock
funds
.

``
Two
years
ago
there
were
massive
redemption
levels
over
the
weekend
and
a
lot
of
fear
around
,
''
said
C.
Bruce
Johnstone
,
who
runs
Fidelity
Investments
'
$
5
billion
Equity-Income
Fund
.

``
This
feels
more
like
a
one-shot
deal
.

People
are
n't
panicking
.
''

The
test
may
come
today
.

Friday
's
stock
market
sell-off
came
too
late
for
many
investors
to
act
.

Some
shareholders
have
held
off
until
today
because
any
fund
exchanges
made
after
Friday
's
close
would
take
place
at
today
's
closing
prices
.

Stock
fund
redemptions
during
the
1987
debacle
did
n't
begin
to
snowball
until
after
the
market
opened
on
Black
Monday
.

But
fund
managers
say
they
're
ready
.

Many
have
raised
cash
levels
,
which
act
as
a
buffer
against
steep
market
declines
.

Mario
Gabelli
,
for
instance
,
holds
cash
positions
well
above
20
%
in
several
of
his
funds
.

Windsor
Fund
's
John
Neff
and
Mutual
Series
'
Michael
Price
said
they
had
raised
their
cash
levels
to
more
than
20
%
and
30
%
,
respectively
,
this
year
.

Even
Peter
Lynch
,
manager
of
Fidelity
's
$
12.7
billion
Magellan
Fund
,
the
nation
's
largest
stock
fund
,
built
up
cash
to
7
%
or
$
850
million
.

One
reason
is
that
after
two
years
of
monthly
net
redemptions
,
the
fund
posted
net
inflows
of
money
from
investors
in
August
and
September
.

``
I
've
let
the
money
build
up
,
''
Mr.
Lynch
said
,
who
added
that
he
has
had
trouble
finding
stocks
he
likes
.

Not
all
funds
have
raised
cash
levels
,
of
course
.

As
a
group
,
stock
funds
held
10.2
%
of
assets
in
cash
as
of
August
,
the
latest
figures
available
from
the
Investment
Company
Institute
.

That
was
modestly
higher
than
the
8.8
%
and
9.2
%
levels
in
August
and
September
of
1987
.

Also
,
persistent
redemptions
would
force
some
fund
managers
to
dump
stocks
to
raise
cash
.

But
a
strong
level
of
investor
withdrawals
is
much
more
unlikely
this
time
around
,
fund
managers
said
.

A
major
reason
is
that
investors
already
have
sharply
scaled
back
their
purchases
of
stock
funds
since
Black
Monday
.

Stock-fund
sales
have
rebounded
in
recent
months
,
but
monthly
net
purchases
are
still
running
at
less
than
half
1987
levels
.

``
There
's
not
nearly
as
much
froth
,
''
said
John
Bogle
,
chairman
of
Vanguard
Group
Inc.
,
a
big
Valley
Forge
,
Pa.
,
fund
company
.

Many
fund
managers
argue
that
now
's
the
time
to
buy
.

Vincent
Bajakian
,
manager
of
the
$
1.8
billion
Wellington
Fund
,
added
to
his
positions
in
Bristol-Myers
Squibb
,
Woolworth
and
Dun
&
Bradstreet
Friday
.

And
today
he
'll
be
looking
to
buy
drug
stocks
like
Eli
Lilly
,
Pfizer
and
American
Home
Products
whose
dividend
yields
have
been
bolstered
by
stock
declines
.

Fidelity
's
Mr.
Lynch
,
for
his
part
,
snapped
up
Southern
Co.
shares
Friday
after
the
stock
got
hammered
.

If
the
market
drops
further
today
,
he
said
he
'll
be
buying
blue
chips
such
as
Bristol-Myers
and
Kellogg
.

``
If
they
croak
stocks
like
that
,
''
he
said
,
it
presents
an
opportunity
that
is
``
the
kind
of
thing
you
dream
about
.
''

Major
mutual-fund
groups
said
phone
calls
were
arriving
at
twice
the
normal
weekend
pace
yesterday
.

But
most
investors
were
seeking
share
prices
and
other
information
.

Trading
volume
was
only
modestly
higher
than
normal
.

Still
,
fund
groups
are
n't
taking
any
chances
.

They
hope
to
avoid
the
jammed
phone
lines
and
other
snags
that
infuriated
some
fund
investors
in
October
1987
.

Fidelity
on
Saturday
opened
its
54
walk-in
investor
centers
across
the
country
.

The
centers
normally
are
closed
through
the
weekend
.

In
addition
,
East
Coast
centers
will
open
at
7:30
EDT
this
morning
,
instead
of
the
normal
8:30
.

T.
Rowe
Price
Associates
Inc.
increased
its
staff
of
phone
representatives
to
handle
investor
requests
.

The
Baltimore-based
group
noted
that
some
investors
moved
money
from
stock
funds
to
money-market
funds
.

But
most
investors
seemed
to
be
``
in
an
information
mode
rather
than
in
a
transaction
mode
,
''
said
Steven
Norwitz
,
a
vice
president
.

And
Vanguard
,
among
other
groups
,
said
it
was
adding
more
phone
representatives
today
to
help
investors
get
through
.

In
an
unusual
move
,
several
funds
moved
to
calm
investors
with
recordings
on
their
toll-free
phone
lines
.

``
We
view
{
Friday
's
}
market
decline
as
offering
us
a
buying
opportunity
as
long-term
investors
,
''
a
recording
at
Gabelli
&
Co.
funds
said
over
the
weekend
.

The
Janus
Group
had
a
similar
recording
for
investors
.

Several
fund
managers
expect
a
rough
market
this
morning
before
prices
stabilize
.

Some
early
selling
is
likely
to
stem
from
investors
and
portfolio
managers
who
want
to
lock
in
this
year
's
fat
profits
.

Stock
funds
have
averaged
a
staggering
gain
of
25
%
through
September
,
according
to
Lipper
Analytical
Services
Inc
.

Elaine
Garzarelli
,
who
runs
Shearson
Lehman
Hutton
Inc.
's
$
335
million
Sector
Analysis
Portfolio
,
predicts
the
market
will
open
down
at
least
50
points
on
technical
factors
and
``
some
panic
selling
.
''

But
she
expects
prices
to
rebound
soon
and
is
telling
investors
she
expects
the
stock
market
wo
n't
decline
more
than
10
%
to
15
%
from
recent
highs
.

``
This
is
not
a
major
crash
,
''
she
said
.

Nevertheless
,
Ms.
Garzarelli
said
she
was
swamped
with
phone
calls
over
the
weekend
from
nervous
shareholders
.

``
Half
of
them
are
really
scared
and
want
to
sell
,
''
she
said
,
``
but
I
'm
trying
to
talk
them
out
of
it
.
''

She
added
,
``
If
they
all
were
bullish
,
I
'd
really
be
upset
.
''

The
backdrop
to
Friday
's
slide
was
markedly
different
from
that
of
the
October
1987
crash
,
fund
managers
argue
.

Two
years
ago
,
unlike
today
,
the
dollar
was
weak
,
interest
rates
were
rising
and
the
market
was
very
overvalued
,
they
say
.

``
From
the
investors
'
standpoint
,
institutions
and
individuals
learned
a
painful
lesson
...
by
selling
at
the
lows
''
on
Black
Monday
,
said
Stephen
Boesel
,
manager
of
the
$
580
million
T.
Rowe
Price
Growth
and
Income
Fund
.

This
time
,
``
I
do
n't
think
we
'll
get
a
panic
reaction
.

Newport
Corp.
said
it
expects
to
report
fiscal-first-quarter
earnings
of
between
15
cents
and
19
cents
a
share
,
somewhat
below
analysts
'
estimates
of
19
cents
to
23
cents
.

The
maker
of
scientific
instruments
and
laser
parts
said
orders
fell
below
expectations
in
recent
months
.

A
spokesman
added
that
sales
in
the
current
quarter
will
about
equal
the
yearearlier
quarter
's
figure
,
when
Newport
reported
net
income
of
$
1.7
million
,
or
21
cents
a
share
,
on
$
14.1
million
in
sales
.

Ripples
from
the
strike
by
55,000
Machinists
union
members
against
Boeing
Co.
reached
air
carriers
Friday
as
America
West
Airlines
announced
it
will
postpone
its
new
service
out
of
Houston
because
of
delays
in
receiving
aircraft
from
the
Seattle
jet
maker
.

Peter
Otradovec
,
vice
president
for
planning
at
the
Phoenix
,
Ariz.
,
carrier
,
said
in
an
interview
that
the
work
stoppage
at
Boeing
,
now
entering
its
13th
day
,
``
has
caused
some
turmoil
in
our
scheduling
''
and
that
more
than
500
passengers
who
were
booked
to
fly
out
of
Houston
on
America
West
would
now
be
put
on
other
airlines
.

Mr.
Otradovec
said
Boeing
told
America
West
that
the
757
it
was
supposed
to
get
this
Thursday
would
n't
be
delivered
until
Nov.
7
--
the
day
after
the
airline
had
been
planning
to
initiate
service
at
Houston
with
four
daily
flights
,
including
three
nonstops
to
Phoenix
and
one
nonstop
to
Las
Vegas
.

Now
,
those
routes
are
n't
expected
to
begin
until
Jan
.

Boeing
is
also
supposed
to
send
to
America
West
another
757
twin-engine
aircraft
as
well
as
a
737
by
year
's
end
.

Those
,
too
,
are
almost
certain
to
arrive
late
.

At
this
point
,
no
other
America
West
flights
--
including
its
new
service
at
San
Antonio
,
Texas
;
Newark
,
N.J.
;
and
Palmdale
,
Calif.
--
have
been
affected
by
the
delays
in
Boeing
deliveries
.

Nevertheless
,
the
company
's
reaction
underscores
the
domino
effect
that
a
huge
manufacturer
such
as
Boeing
can
have
on
other
parts
of
the
economy
.

It
also
is
sure
to
help
the
machinists
put
added
pressure
on
the
company
.

``
I
just
do
n't
feel
that
the
company
can
really
stand
or
would
want
a
prolonged
walkout
,
''
Tom
Baker
,
president
of
Machinists
'
District
751
,
said
in
an
interview
yesterday
.

``
I
do
n't
think
their
customers
would
like
it
very
much
.
''

America
West
,
though
,
is
a
smaller
airline
and
therefore
more
affected
by
the
delayed
delivery
of
a
single
plane
than
many
of
its
competitors
would
be
.

``
I
figure
that
American
and
United
probably
have
such
a
hard
time
counting
all
the
planes
in
their
fleets
,
they
might
not
miss
one
at
all
,
''
Mr.
Otradovec
said
.

Indeed
,
a
random
check
Friday
did
n't
seem
to
indicate
that
the
strike
was
having
much
of
an
effect
on
other
airline
operations
.

Southwest
Airlines
has
a
Boeing
737-300
set
for
delivery
at
the
end
of
this
month
and
expects
to
have
the
plane
on
time
.

``
It
's
so
close
to
completion
,
Boeing
's
told
us
there
wo
n't
be
a
problem
,
''
said
a
Southwest
spokesman
.

A
spokesman
for
AMR
Corp.
said
Boeing
has
assured
American
Airlines
it
will
deliver
a
757
on
time
later
this
month
.

American
is
preparing
to
take
delivery
of
another
757
in
early
December
and
20
more
next
year
and
is
n't
anticipating
any
changes
in
that
timetable
.

In
Seattle
,
a
Boeing
spokesman
explained
that
the
company
has
been
in
constant
communication
with
all
of
its
customers
and
that
it
was
impossible
to
predict
what
further
disruptions
might
be
triggered
by
the
strike
.

Meanwhile
,
supervisors
and
non-striking
employees
have
been
trying
to
finish
some
40
aircraft
--
mostly
747
and
767
jumbo
jets
at
the
company
's
Everett
,
Wash.
,
plant
--
that
were
all
but
completed
before
the
walkout
.

As
of
Friday
,
four
had
been
delivered
and
a
fifth
plane
,
a
747-400
,
was
supposed
to
be
flown
out
over
the
weekend
to
Air
China
.

No
date
has
yet
been
set
to
get
back
to
the
bargaining
table
.

``
We
want
to
make
sure
they
know
what
they
want
before
they
come
back
,
''
said
Doug
Hammond
,
the
federal
mediator
who
has
been
in
contact
with
both
sides
since
the
strike
began
.

The
investment
community
,
for
one
,
has
been
anticipating
a
speedy
resolution
.

Though
Boeing
's
stock
price
was
battered
along
with
the
rest
of
the
market
Friday
,
it
actually
has
risen
over
the
last
two
weeks
on
the
strength
of
new
orders
.

``
The
market
has
taken
two
views
:
that
the
labor
situation
will
get
settled
in
the
short
term
and
that
things
look
very
rosy
for
Boeing
in
the
long
term
,
''
said
Howard
Rubel
,
an
analyst
at
Cyrus
J.
Lawrence
Inc
.

Boeing
's
shares
fell
$
4
Friday
to
close
at
$
57.375
in
composite
trading
on
the
New
York
Stock
Exchange
.

But
Mr.
Baker
said
he
thinks
the
earliest
a
pact
could
be
struck
would
be
the
end
of
this
month
,
hinting
that
the
company
and
union
may
resume
negotiations
as
early
as
this
week
.

Still
,
he
said
,
it
's
possible
that
the
strike
could
last
considerably
longer
.

``
I
would
n't
expect
an
immediate
resolution
to
anything
.
''

Last
week
,
Boeing
Chairman
Frank
Shrontz
sent
striking
workers
a
letter
,
saying
that
``
to
my
knowledge
,
Boeing
's
offer
represents
the
best
overall
three-year
contract
of
any
major
U.S.
industrial
firm
in
recent
history
.
''

But
Mr.
Baker
called
the
letter
--
and
the
company
's
offer
of
a
10
%
wage
increase
over
the
life
of
the
pact
,
plus
bonuses
--
``
very
weak
.
''

He
added
that
the
company
miscalculated
the
union
's
resolve
and
the
workers
'
disgust
with
being
forced
to
work
many
hours
overtime
.

In
separate
developments
:
--
Talks
have
broken
off
between
Machinists
representatives
at
Lockheed
Corp.
and
the
Calabasas
,
Calif.
,
aerospace
company
.

The
union
is
continuing
to
work
through
its
expired
contract
,
however
.

It
had
planned
a
strike
vote
for
next
Sunday
,
but
that
has
been
pushed
back
indefinitely
.

--
United
Auto
Workers
Local
1069
,
which
represents
3,000
workers
at
Boeing
's
helicopter
unit
in
Delaware
County
,
Pa.
,
said
it
agreed
to
extend
its
contract
on
a
day-by-day
basis
,
with
a
10-day
notification
to
cancel
,
while
it
continues
bargaining
.

The
accord
expired
yesterday
.

--
And
Boeing
on
Friday
said
it
received
an
order
from
Martinair
Holland
for
four
model
767-300
wide-body
jetliners
valued
at
a
total
of
about
$
326
million
.

The
planes
,
long
range
versions
of
the
medium-haul
twin-jet
,
will
be
delivered
with
Pratt
&
Whitney
PW4060
engines
.

Pratt
&
Whitney
is
a
unit
of
United
Technologies
Inc
.

Martinair
Holland
is
based
in
Amsterdam
.

A
Boeing
spokeswoman
said
a
delivery
date
for
the
planes
is
still
being
worked
out
``
for
a
variety
of
reasons
,
but
not
because
of
the
strike
.
''

Bridget
O'Brian
contributed
to
this
article
.

Atco
Ltd.
said
its
utilities
arm
is
considering
building
new
electric
power
plants
,
some
valued
at
more
than
one
billion
Canadian
dollars
(
US$
851
million
)
,
in
Great
Britain
and
elsewhere
.

C.S.
Richardson
,
Atco
's
senior
vice
president
,
finance
,
said
its
50.1%-owned
Canadian
Utilities
Ltd.
unit
is
reviewing
cogeneration
projects
in
eastern
Canada
,
and
conventional
electric
power
generating
plants
elsewhere
,
including
Britain
,
where
the
British
government
plans
to
allow
limited
competition
in
electrical
generation
from
private-sector
suppliers
as
part
of
its
privatization
program
.

``
The
projects
are
big
.

They
can
be
C$
1
billion
plus
,
''
Mr.
Richardson
said
.

``
But
we
would
n't
go
into
them
alone
,
''
and
Canadian
Utilities
'
equity
stake
would
be
small
,
he
said
.

``
Ideally
,
we
'd
like
to
be
the
operator
{
of
the
project
}
and
a
modest
equity
investor
.

Our
long
suit
is
our
proven
ability
to
operate
''
power
plants
,
he
said
.

Mr.
Richardson
would
n't
offer
specifics
regarding
Atco
's
proposed
British
project
,
but
he
said
it
would
compete
for
customers
with
two
huge
British
power
generating
companies
that
would
be
formed
under
the
country
's
plan
to
privatize
its
massive
water
and
electric
utilities
.

Britain
's
government
plans
to
raise
about
#
20
billion
(
$
31.05
billion
)
from
the
sale
of
most
of
its
giant
water
and
electric
utilities
,
beginning
next
month
.

The
planned
electric
utility
sale
,
scheduled
for
next
year
,
is
alone
expected
to
raise
#
13
billion
,
making
it
the
world
's
largest
public
offering
.

Under
terms
of
the
plan
,
independent
generators
would
be
able
to
compete
for
15
%
of
customers
until
1994
,
and
for
another
10
%
between
1994
and
1998
.

Canadian
Utilities
had
1988
revenue
of
C$
1.16
billion
,
mainly
from
its
natural
gas
and
electric
utility
businesses
in
Alberta
,
where
the
company
serves
about
800,000
customers
.

``
There
seems
to
be
a
move
around
the
world
to
deregulate
the
generation
of
electricity
,
''
Mr.
Richardson
said
,
and
Canadian
Utilities
hopes
to
capitalize
on
it
.

``
This
is
a
real
thrust
on
our
utility
side
,
''
he
said
,
adding
that
Canadian
Utilities
is
also
mulling
projects
in
underdeveloped
countries
,
though
he
would
be
specific
.

Canadian
Utilities
is
n't
alone
in
exploring
power
generation
opportunities
in
Britain
,
in
anticipation
of
the
privatization
program
.

``
We
're
certainly
looking
at
some
power
generating
projects
in
England
,
''
said
Bruce
Stram
,
vice
president
,
corporate
strategy
and
corporate
planning
,
with
Enron
Corp.
,
Houston
,
a
big
natural
gas
producer
and
pipeline
operator
.

Mr.
Stram
said
Enron
is
considering
building
gas-fired
power
plants
in
the
U.K.
capable
of
producing
about
500
megawatts
of
power
at
a
cost
of
about
$
300
million
to
$
400
million
.

PSE
Inc.
said
it
expects
to
report
third
earnings
of
$
1.3
million
to
$
1.7
million
,
or
14
cents
to
18
cents
a
share
.

In
the
year-ago
quarter
,
the
designer
and
operator
of
cogeneration
and
waste
heat
recovery
plants
had
net
income
of
$
326,000
,
or
four
cents
a
share
,
on
revenue
of
about
$
41.4
million
.

The
company
said
the
improvement
is
related
to
additional
cogeneration
facilities
that
have
been
put
into
operation
.

CONCORDE
trans-Atlantic
flights
are
$
2,400
to
Paris
and
$
3,200
to
London
.

In
a
Centennial
Journal
article
Oct.
5
,
the
fares
were
reversed
.

Diamond
Shamrock
Offshore
Partners
said
it
had
discovered
gas
offshore
Louisiana
.

The
well
flowed
at
a
rate
of
2.016
million
cubic
feet
of
gas
a
day
through
a
16
64-inch
opening
at
depths
between
5,782
and
5,824
feet
.

Diamond
Shamrock
is
the
operator
,
with
a
100
%
interest
in
the
well
.

Diamond
Shamrock
Offshore
's
stock
rose
12.5
cents
Friday
to
close
at
$
8.25
in
New
York
Stock
Exchange
composite
trading
.

Kaufman
&
Broad
Home
Corp.
said
it
formed
a
$
53.4
million
limited
partnership
subsidiary
to
buy
land
in
California
suitable
for
residential
development
.

The
partnership
,
Kaufman
&
Broad
Land
Development
Venture
Limited
Partnership
,
is
a
50-50
joint
venture
with
a
trust
created
by
institutional
clients
of
Heitman
Advisory
Corp.
,
a
unit
of
Heitman
Financial
Corp.
,
a
real
estate
advisory
,
management
and
development
company
with
offices
in
Chicago
and
Beverly
Hills
,
Calif
.

Kaufman
&
Broad
,
a
home
building
company
,
declined
to
identify
the
institutional
investors
.

The
land
to
be
purchased
by
the
joint
venture
has
n't
yet
received
zoning
and
other
approvals
required
for
development
,
and
part
of
Kaufman
&
Broad
's
job
will
be
to
obtain
such
approvals
.

The
partnership
runs
the
risk
that
it
may
not
get
the
approvals
for
development
,
but
in
return
,
it
can
buy
land
at
wholesale
rather
than
retail
prices
,
which
can
result
in
sizable
savings
,
said
Bruce
Karatz
,
president
and
chief
executive
officer
of
Kaufman
&
Broad
.

``
There
are
really
very
few
companies
that
have
adequate
capital
to
buy
properties
in
a
raw
state
for
cash
.

Typically
,
developers
option
property
,
and
then
once
they
get
the
administrative
approvals
,
they
buy
it
,
''
said
Mr.
Karatz
,
adding
that
he
believes
the
joint
venture
is
the
first
of
its
kind
.

``
We
usually
operate
in
that
conservative
manner
.
''

By
setting
up
the
joint
venture
,
Kaufman
&
Broad
can
take
the
more
aggressive
approach
of
buying
raw
land
,
while
avoiding
the
negative
impacts
to
its
own
balance
sheet
,
Mr.
Karatz
said
.

The
company
is
putting
up
only
10
%
of
the
capital
,
although
it
is
responsible
for
providing
management
,
planning
and
processing
services
to
the
joint
venture
.

``
This
is
one
of
the
best
ways
to
assure
a
pipeline
of
land
to
fuel
our
growth
at
a
minimum
risk
to
our
company
,
''
Mr.
Karatz
said
.

When
the
price
of
plastics
took
off
in
1987
,
Quantum
Chemical
Corp.
went
along
for
the
ride
.

The
timing
of
Quantum
's
chief
executive
officer
,
John
Hoyt
Stookey
,
appeared
to
be
nothing
less
than
inspired
,
because
he
had
just
increased
Quantum
's
reliance
on
plastics
.

The
company
outpaced
much
of
the
chemical
industry
as
annual
profit
grew
fivefold
in
two
years
.

Mr.
Stookey
said
of
the
boom
,
``
It
's
going
to
last
a
whole
lot
longer
than
anybody
thinks
.
''

But
now
prices
have
nose-dived
and
Quantum
's
profit
is
plummeting
.

Some
securities
analysts
are
looking
for
no
better
than
break-even
results
from
the
company
for
the
third
quarter
,
compared
with
year-earlier
profit
of
$
99.8
million
,
or
$
3.92
a
share
,
on
sales
of
$
724.4
million
.

The
stock
,
having
lost
nearly
a
quarter
of
its
value
since
Sept.
1
,
closed
at
$
34.375
share
,
down
$
1.125
,
in
New
York
Stock
Exchange
composite
trading
Friday
.

To
a
degree
,
Quantum
represents
the
new
times
that
have
arrived
for
producers
of
the
so-called
commodity
plastics
that
pervade
modern
life
.

Having
just
passed
through
one
of
the
most
profitable
periods
in
their
history
,
these
producers
now
see
their
prices
eroding
.

Pricing
cycles
,
to
be
sure
,
are
nothing
new
for
plastics
producers
.

And
the
financial
decline
of
some
looks
steep
only
in
comparison
with
the
heady
period
that
is
just
behind
them
.

``
We
were
all
wonderful
heroes
last
year
,
''
says
an
executive
at
one
of
Quantum
's
competitors
.

``
Now
we
're
at
the
bottom
of
the
heap
.
''

At
Quantum
,
which
is
based
in
New
York
,
the
trouble
is
magnified
by
the
company
's
heavy
dependence
on
plastics
.

Once
known
as
National
Distillers
&
Chemical
Corp.
,
the
company
exited
the
wine
and
spirits
business
and
plowed
more
of
its
resources
into
plastics
after
Mr.
Stookey
took
the
chief
executive
's
job
in
1986
.

Mr.
Stookey
,
59
years
old
,
declined
to
be
interviewed
for
this
article
,
but
he
has
consistently
argued
that
over
the
long
haul
--
across
both
the
peaks
and
the
troughs
of
the
plastics
market
--
Quantum
will
prosper
through
its
new
direction
.

Quantum
's
lot
is
mostly
tied
to
polyethylene
resin
,
used
to
make
garbage
bags
,
milk
jugs
,
housewares
,
toys
and
meat
packaging
,
among
other
items
.

In
the
U.S.
polyethylene
market
,
Quantum
has
claimed
the
largest
share
,
about
20
%
.

But
its
competitors
--
including
Dow
Chemical
Co.
,
Union
Carbide
Corp.
and
several
oil
giants
--
have
much
broader
business
interests
and
so
are
better
cushioned
against
price
swings
.

When
the
price
of
polyethylene
moves
a
mere
penny
a
pound
,
Quantum
's
annual
profit
fluctuates
by
about
85
cents
a
share
,
provided
no
other
variables
are
changing
.

In
recent
months
the
price
of
polyethylene
,
even
more
than
that
of
other
commodity
plastics
,
has
taken
a
dive
.

Benchmark
grades
,
which
still
sold
for
as
much
as
50
cents
a
pound
last
spring
,
have
skidded
to
between
35
cents
and
40
cents
.

Meanwhile
,
the
price
of
ethylene
,
the
chemical
building
block
of
polyethylene
,
has
n't
dropped
nearly
so
fast
.

That
discrepancy
hurts
Quantum
badly
,
because
its
own
plants
cover
only
about
half
of
its
ethylene
needs
.

By
many
accounts
,
an
early
hint
of
a
price
rout
in
the
making
came
at
the
start
of
this
year
.

China
,
which
had
been
putting
in
huge
orders
for
polyethylene
,
abruptly
halted
them
.

Calculating
that
excess
polyethylene
would
soon
be
sloshing
around
the
world
,
other
buyers
then
bet
that
prices
had
peaked
and
so
began
to
draw
down
inventories
rather
than
order
new
product
.

Kenneth
Mitchell
,
director
of
Dow
's
polyethylene
business
,
says
producers
were
surprised
to
learn
how
much
inventories
had
swelled
throughout
the
distribution
chain
as
prices
spiraled
up
.

``
People
were
even
hoarding
bags
,
''
he
says
.

Now
producers
hope
prices
have
hit
bottom
.

They
recently
announced
increases
of
a
few
cents
a
pound
to
take
effect
in
the
next
several
weeks
.

No
one
knows
,
however
,
whether
the
new
posted
prices
will
stick
once
producers
and
customers
start
to
haggle
.

One
doubter
is
George
Krug
,
a
chemical-industry
analyst
at
Oppenheimer
&
Co.
and
a
bear
on
plastics
stocks
.

Noting
others
'
estimates
of
when
price
increases
can
be
sustained
,
he
remarks
,
``
Some
say
October
.

Some
say
November
.

I
say
1992
.
''

He
argues
that
efforts
to
firm
up
prices
will
be
undermined
by
producers
'
plans
to
expand
production
capacity
.

A
quick
turnaround
is
crucial
to
Quantum
because
its
cash
requirements
remain
heavy
.

The
company
is
trying
to
carry
out
a
three-year
,
$
1.3
billion
plant-expansion
program
started
this
year
.

At
the
same
time
,
its
annual
payments
on
long-term
debt
will
more
than
double
from
a
year
ago
to
about
$
240
million
,
largely
because
of
debt
taken
on
to
pay
a
$
50-a-share
special
dividend
earlier
this
year
.

Quantum
described
the
payout
at
the
time
as
a
way
for
it
to
share
the
bonanza
with
its
holders
,
because
its
stock
price
was
n't
reflecting
the
huge
profit
increases
.

Some
analysts
saw
the
payment
as
an
effort
also
to
dispel
takeover
speculation
.

Whether
a
cash
crunch
might
eventually
force
the
company
to
cut
its
quarterly
dividend
,
raised
36
%
to
75
cents
a
share
only
a
year
ago
,
has
become
a
topic
of
intense
speculation
on
Wall
Street
since
Mr.
Stookey
deflected
dividend
questions
in
a
Sept.
29
meeting
with
analysts
.

Some
viewed
his
response
--
that
company
directors
review
the
dividend
regularly
--
as
nothing
more
than
the
standard
line
from
executives
.

But
others
came
away
thinking
he
had
given
something
less
than
his
usual
straight-from-the-shoulder
performance
.

In
any
case
,
on
the
day
of
the
meeting
,
Quantum
's
shares
slid
$
2.625
to
$
36.625
in
Big
Board
trading
.

On
top
of
everything
else
,
Quantum
confronts
a
disaster
at
its
plant
in
Morris
,
Ill
.

After
an
explosion
idled
the
plant
in
June
,
the
company
progressed
in
September
to
within
12
hours
of
completing
the
drawn-out
process
of
restarting
it
.

Then
a
second
explosion
occurred
.

Two
workers
died
and
six
remain
in
the
hospital
.

This
human
toll
adds
the
most
painful
dimension
yet
to
the
sudden
change
in
Quantum
's
fortunes
.

Until
this
year
,
the
company
had
been
steadily
lowering
its
accident
rate
and
picking
up
trade-group
safety
awards
.

A
prolonged
production
halt
at
the
plant
could
introduce
another
imponderable
into
Quantum
's
financial
future
.

When
a
plant
has
just
been
running
flat
out
to
meet
demand
,
calculating
lost
profit
and
thus
claims
under
business-interruption
insurance
is
straightforward
.

But
the
numbers
become
trickier
--
and
subject
to
dickering
between
insured
and
insurer
--
when
demand
is
shifting
.

``
You
say
you
could
have
sold
X
percent
of
this
product
and
Y
percent
of
that
,
''
recalls
Theodore
Semegran
,
an
analyst
at
Shearson
Lehman
Hutton
who
went
through
this
exercise
during
his
former
career
as
a
chemical
engineer
.

``
And
then
you
still
have
to
negotiate
.
''

Quantum
hopes
the
Morris
plant
,
where
limited
production
got
under
way
last
week
,
will
resume
full
operation
by
year
's
end
.

The
plant
usually
accounts
for
20
%
to
25
%
of
Quantum
's
polyethylene
production
and
50
%
of
its
ethylene
production
.

Not
everything
looks
grim
for
Quantum
.

The
plant
expansion
should
strengthen
the
company
's
sway
in
the
polyethylene
business
,
where
market
share
is
often
taken
through
sheer
capacity
.

By
lifting
ethylene
production
,
the
expansion
will
also
lower
the
company
's
raw
material
costs
.

Quantum
is
also
tightening
its
grip
on
its
one
large
business
outside
chemicals
,
propane
marketing
.

Through
a
venture
with
its
investment
banker
,
First
Boston
Corp.
,
Quantum
completed
in
August
an
acquisition
of
Petrolane
Inc.
in
a
transaction
valued
at
$
1.18
billion
.

Petrolane
is
the
second-largest
propane
distributor
in
the
U.S.
.

The
largest
,
Suburban
Propane
,
was
already
owned
by
Quantum
.

Still
,
Quantum
has
a
crisis
to
get
past
right
now
.

Some
analysts
speculate
the
weakening
stock
may
yet
attract
a
suitor
.

The
name
surfacing
in
rumors
is
British
Petroleum
Co.
,
which
is
looking
to
expand
its
polyethylene
business
in
the
U.S.
.

Asked
about
a
bid
for
Quantum
,
a
BP
spokesman
says
,
``
We
pretty
much
have
a
policy
of
not
commenting
on
rumors
,
and
I
think
that
falls
in
that
category
.

RJR
Nabisco
Inc.
is
disbanding
its
division
responsible
for
buying
network
advertising
time
,
just
a
month
after
moving
11
of
the
group
's
14
employees
to
New
York
from
Atlanta
.

A
spokesman
for
the
New
York-based
food
and
tobacco
giant
,
taken
private
earlier
this
year
in
a
$
25
billion
leveraged
buy-out
by
Kohlberg
Kravis
Roberts
&
Co.
,
confirmed
that
it
is
shutting
down
the
RJR
Nabisco
Broadcast
unit
,
and
dismissing
its
14
employees
,
in
a
move
to
save
money
.

The
spokesman
said
RJR
is
discussing
its
network-buying
plans
with
its
two
main
advertising
firms
,
FCB\/Leber
Katz
and
McCann
Erickson
.

``
We
found
with
the
size
of
our
media
purchases
that
an
ad
agency
could
do
just
as
good
a
job
at
significantly
lower
cost
,
''
said
the
spokesman
,
who
declined
to
specify
how
much
RJR
spends
on
network
television
time
.

An
executive
close
to
the
company
said
RJR
is
spending
about
$
140
million
on
network
television
time
this
year
,
down
from
roughly
$
200
million
last
year
.

The
spokesman
said
the
broadcast
unit
will
be
disbanded
Dec.
1
,
and
the
move
wo
n't
affect
RJR
's
print
,
radio
and
spot-television
buying
practices
.

The
broadcast
group
had
been
based
in
New
York
until
a
year
ago
,
when
RJR
's
previous
management
moved
it
to
Atlanta
,
the
company
's
headquarters
before
this
summer
.

One
employee
with
the
group
said
RJR
moved
11
employees
of
the
group
back
to
New
York
in
September
because
``
there
was
supposed
to
be
a
future
.
''

He
said
the
company
hired
three
more
buyers
for
the
unit
within
the
past
two
weeks
,
wooing
them
from
jobs
with
advertising
agencies
.

The
RJR
spokesman
said
the
company
moved
the
11
employees
to
New
York
last
month
because
the
group
had
then
been
in
the
midst
of
purchasing
ad
time
for
the
networks
'
upcoming
season
.

``
The
studies
{
on
closing
the
unit
}
could
n't
be
completed
until
now
,
''
he
said
.

The
group
's
president
,
Peter
Chrisanthopoulos
,
was
n't
in
his
office
Friday
afternoon
to
comment
.

The
U.S.
,
which
is
finalizing
its
steel-import
quotas
,
is
allocating
a
larger
share
of
its
steel
market
to
developing
and
newly
industrialized
countries
which
have
relatively
unsubsidized
steel
industries
.

Meanwhile
,
the
U.S.
has
negotiated
a
significant
cut
in
Japan
's
steel
quota
,
and
made
only
a
minor
increase
to
the
steel
allotment
for
the
European
Community
.

Brazil
,
similar
to
Mexico
and
South
Korea
,
is
expected
to
negotiate
a
somewhat
bigger
share
of
the
U.S.
market
than
it
had
under
the
previous
five-year
steel
quotas
,
which
expired
Sept.
30
.

Brazil
and
Venezuela
are
the
only
two
countries
that
have
n't
completed
steel
talks
with
the
U.S.
for
the
year
ending
Oct.
1
,
1990
.

In
recent
years
,
U.S.
steelmakers
have
supplied
about
80
%
of
the
100
million
tons
of
steel
used
annually
by
the
nation
.

Of
the
remaining
20
%
needed
,
the
steel-quota
negotiations
allocate
about
15
%
to
foreign
suppliers
,
with
the
difference
supplied
mainly
by
Canada
--
which
is
n't
included
in
the
quota
program
.

Other
countries
that
do
n't
have
formal
steel
quotas
with
the
U.S.
,
such
as
Taiwan
,
Sweden
and
Argentina
,
also
have
supplied
steel
.

Some
of
these
countries
have
in
recent
years
made
informal
agreements
with
the
U.S.
that
are
similar
to
quotas
.

The
Bush
administration
earlier
this
year
said
it
would
extend
steel
quotas
,
known
as
voluntary
restraint
agreements
,
until
March
31
,
1992
.

It
also
said
it
would
use
that
two-and-a-half
year
period
to
work
toward
an
international
consensus
on
freeing
up
the
international
steel
trade
,
which
has
been
notoriously
managed
,
subsidized
and
protected
by
governments
.

The
U.S.
termed
its
plan
,
a
``
trade
liberalization
program
,
''
despite
the
fact
that
it
is
merely
an
extension
.

Mexico
,
which
was
one
of
the
first
countries
to
conclude
its
steel
talks
with
the
U.S.
,
virtually
doubled
its
quota
to
0.95
%
of
the
U.S.
steel
market
from
0.48
%
under
the
previous
quotas
.

South
Korea
,
which
had
1.9
%
under
the
previous
quotas
,
is
set
to
get
a
small
increase
to
about
1.95
%
.

That
increase
rises
to
slightly
more
than
2
%
of
the
U.S.
market
if
a
joint
Korean-U.S.
steel
project
is
included
.

Meanwhile
,
Brazil
is
expected
to
increase
its
allowance
from
the
1.43
%
share
it
has
had
in
recent
years
.

The
EC
and
Japan
--
the
U.S.
's
largest
steel
suppliers
--
have
n't
been
filling
their
quotas
to
the
full
extent
.

The
EC
steel
industry
,
which
has
been
coping
with
strong
European
demand
,
has
been
supplying
about
5
%
of
the
U.S.
market
compared
with
recent
quotas
of
about
6.7
%
.

Japan
has
been
shipping
steel
to
total
about
4.5
%
of
the
U.S.
market
compared
with
a
quota
of
5.9
%
.

In
the
recent
talks
,
the
EC
had
its
quota
increased
about
300,000
tons
,
to
7
%
of
the
U.S.
market
from
6.7
%
in
1988
.

But
its
quota
has
been
as
high
as
6.9
%
in
1984
.

Japan
,
however
,
has
agreed
to
cut
its
quota
to
about
5
%
from
5.9
%
previously
.

Japan
,
the
EC
,
Brazil
,
Mexico
and
South
Korea
provide
about
80
%
of
the
steel
imported
to
the
U.S.
under
the
quota
program
.

The
balance
is
supplied
by
a
host
of
smaller
exporters
,
such
as
Australia
and
Venezuela
.

The
U.S.
had
about
an
extra
2
%
of
the
domestic
steel
market
to
give
to
foreign
suppliers
in
its
quota
talks
.

That
was
essentially
made
up
of
a
1
%
increase
in
the
overall
quota
program
and
1
%
from
cutting
Japan
's
allowance
.

Negotiators
from
the
White
House
trade
office
will
repeat
these
quota
negotiations
next
year
when
they
will
have
another
1
%
of
the
U.S.
steel
market
to
allocate
.

These
optional
1%-a-year
increases
to
the
steel
quota
program
are
built
into
the
Bush
administration
's
steel-quota
program
to
give
its
negotiators
leverage
with
foreign
steel
suppliers
to
try
to
get
them
to
withdraw
subsidies
and
protectionism
from
their
own
steel
industries
.

Elcotel
Inc.
expects
fiscal
second-quarter
earnings
to
trail
1988
results
,
but
anticipates
that
several
new
products
will
lead
to
a
``
much
stronger
''
performance
in
its
second
half
.

Elcotel
,
a
telecommunications
company
,
had
net
income
of
$
272,000
,
or
five
cents
a
share
,
in
its
year-earlier
second
quarter
,
ended
Sept.
30
.

Revenue
totaled
$
5
million
.

George
Pierce
,
chairman
and
chief
executive
officer
,
said
in
an
interview
that
earnings
in
the
most
recent
quarter
will
be
about
two
cents
a
share
on
revenue
of
just
under
$
4
million
.

The
lower
results
,
Mr.
Pierce
said
,
reflect
a
12-month
decline
in
industry
sales
of
privately
owned
pay
telephones
,
Elcotel
's
primary
business
.

Although
Mr.
Pierce
expects
that
line
of
business
to
strengthen
in
the
next
year
,
he
said
Elcotel
will
also
benefit
from
moving
into
other
areas
.

Foremost
among
those
is
the
company
's
entrance
into
the
public
facsimile
business
,
Mr.
Pierce
said
.

Within
the
next
year
,
Elcotel
expects
to
place
10,000
fax
machines
,
made
by
Minolta
in
Japan
,
in
hotels
,
municipal
buildings
,
drugstores
and
other
public
settings
around
the
country
.

Elcotel
will
provide
a
credit-card
reader
for
the
machines
to
collect
,
store
and
forward
billing
data
.

Mr.
Pierce
said
Elcotel
should
realize
a
minimum
of
$
10
of
recurring
net
earnings
for
each
machine
each
month
.

Elcotel
has
also
developed
an
automatic
call
processor
that
will
make
further
use
of
the
company
's
system
for
automating
and
handling
credit-card
calls
and
collect
calls
.

Automatic
call
processors
will
provide
that
system
for
virtually
any
telephone
,
Mr.
Pierce
said
,
not
just
phones
produced
by
Elcotel
.

The
company
will
also
be
producing
a
new
line
of
convenience
telephones
,
which
do
n't
accept
coins
,
for
use
in
hotel
lobbies
,
office
lobbies
,
hospitality
lounges
and
similar
settings
.

Mr.
Pierce
estimated
that
the
processors
and
convenience
phones
would
produce
about
$
5
of
recurring
net
earnings
for
each
machine
each
month
.

Britain
's
retail
price
index
rose
0.7
%
in
September
from
August
and
was
up
7.6
%
for
the
year
,
the
Central
Statistical
Office
said
.

Quest
Medical
Inc.
said
it
adopted
a
shareholders
'
rights
plan
in
which
rights
to
purchase
shares
of
common
stock
will
be
distributed
as
a
dividend
to
shareholders
of
record
as
of
Oct.
23
.

The
company
said
the
plan
was
n't
adopted
in
response
to
any
known
offers
for
Quest
,
a
maker
and
marketer
of
hospital
products
.

The
rights
allow
shareholders
to
purchase
Quest
stock
at
a
discount
if
any
person
or
group
acquires
more
than
15
%
of
the
company
's
common
stock
or
announces
a
tender
offer
.

Measuring
cups
may
soon
be
replaced
by
tablespoons
in
the
laundry
room
.

Procter
&
Gamble
Co.
plans
to
begin
testing
next
month
a
superconcentrated
detergent
that
will
require
only
a
few
spoonfuls
per
washload
.

The
move
stems
from
lessons
learned
in
Japan
where
local
competitors
have
had
phenomenal
success
with
concentrated
soapsuds
.

It
also
marks
P&G
's
growing
concern
that
its
Japanese
rivals
,
such
as
Kao
Corp.
,
may
bring
their
superconcentrates
to
the
U.S.
.

The
Cincinnati
consumer-products
giant
got
clobbered
two
years
ago
in
Japan
when
Kao
introduced
a
powerful
detergent
,
called
Attack
,
which
quickly
won
a
30
%
stake
in
the
Japanese
markets
.

``
They
do
n't
want
to
get
caught
again
,
''
says
one
industry
watcher
.

Retailers
in
Phoenix
,
Ariz.
,
say
P&G
's
new
powdered
detergent
--
to
be
called
Cheer
with
Color
Guard
--
will
be
on
shelves
in
that
market
by
early
November
.

A
P&G
spokeswoman
confirmed
that
shipments
to
Phoenix
started
late
last
month
.

She
said
the
company
will
study
results
from
this
market
before
expanding
to
others
.

Superconcentrates
are
n't
entirely
new
for
P&G
.

The
company
introduced
a
superconcentrated
Lemon
Cheer
in
Japan
after
watching
the
success
of
Attack
.

When
Attack
hit
the
shelves
in
1987
,
P&G
's
share
of
the
Japanese
market
fell
to
about
8
%
from
more
than
20
%
.

With
the
help
of
Lemon
Cheer
,
P&G
's
share
is
now
estimated
to
be
12
%
.

While
the
Japanese
have
embraced
the
compact
packaging
and
convenience
of
concentrated
products
,
the
true
test
for
P&G
will
be
in
the
$
4
billion
U.S.
detergent
market
,
where
growth
is
slow
and
liquids
have
gained
prominence
over
powders
.

The
company
may
have
chosen
to
market
the
product
under
the
Cheer
name
since
it
's
already
expanded
its
best-selling
Tide
into
16
different
varieties
,
including
this
year
's
big
hit
,
Tide
with
Bleach
.

With
superconcentrates
,
however
,
it
is
n't
always
easy
to
persuade
consumers
that
less
is
more
;
many
people
tend
to
dump
too
much
detergent
into
the
washing
machine
,
believing
that
it
takes
a
cup
of
powder
to
really
clean
the
laundry
.

In
the
early
1980s
,
P&G
tried
to
launch
here
a
concentrated
detergent
under
the
Ariel
brand
name
that
it
markets
in
Europe
.

But
the
product
,
which
was
n't
as
concentrated
as
the
new
Cheer
,
bombed
in
a
market
test
in
Denver
and
was
dropped
.

P&G
and
others
also
have
tried
repeatedly
to
hook
consumers
on
detergent
and
fabric
softener
combinations
in
pouches
,
but
they
have
n't
sold
well
,
despite
the
convenience
.

But
P&G
contends
the
new
Cheer
is
a
unique
formula
that
also
offers
an
ingredient
that
prevents
colors
from
fading
.

And
retailers
are
expected
to
embrace
the
product
,
in
part
because
it
will
take
up
less
shelf
space
.

``
When
shelf
space
was
cheap
,
bigger
was
better
,
''
says
Hugh
Zurkuhlen
,
an
analyst
at
Salomon
Bros
.

But
with
so
many
brands
vying
for
space
,
that
's
no
longer
the
case
.

If
the
new
Cheer
sells
well
,
the
trend
toward
smaller
packaging
is
likely
to
accelerate
as
competitors
follow
with
their
own
superconcentrates
.

Then
retailers
``
will
probably
push
the
{
less-established
}
brands
out
altogether
,
''
he
says
.

Competition
is
bound
to
get
tougher
if
Kao
introduces
a
product
like
Attack
in
the
U.S.
.

To
be
sure
,
Kao
would
n't
have
an
easy
time
taking
U.S.
market
share
away
from
the
mighty
P&G
,
which
has
about
23
%
of
the
market
.

Kao
officials
previously
have
said
they
are
interested
in
selling
detergents
in
the
U.S.
,
but
so
far
the
company
has
focused
on
acquisitions
,
such
as
last
year
's
purchase
of
Andrew
Jergens
Co.
,
a
Cincinnati
hand-lotion
maker
.

It
also
has
a
product-testing
facility
in
California
.

Some
believe
P&G
's
interest
in
a
superconcentrated
detergent
goes
beyond
the
concern
for
the
Japanese
.

``
This
is
something
P&G
would
do
with
or
without
Kao
,
''
says
Mr.
Zurkuhlen
.

With
economic
tension
between
the
U.S.
and
Japan
worsening
,
many
Japanese
had
feared
last
week
's
visit
from
U.S.
Trade
Representative
Carla
Hills
.

They
expected
a
new
barrage
of
demands
that
Japan
do
something
quickly
to
reduce
its
trade
surplus
with
the
U.S.
.

Instead
,
they
got
a
discussion
of
the
need
for
the
U.S.
and
Japan
to
work
together
and
of
the
importance
of
the
long-term
view
.

Mrs.
Hills
'
first
trip
to
Japan
as
America
's
chief
trade
negotiator
had
a
completely
different
tone
from
last
month
's
visit
by
Commerce
Secretary
Robert
A.
Mosbacher
.

Mr.
Mosbacher
called
for
concrete
results
by
next
spring
in
negotiations
over
fundamental
Japanese
business
practices
that
supposedly
inhibit
free
trade
.

He
said
such
results
should
be
``
measurable
in
dollars
and
cents
''
in
reducing
the
U.S.
trade
deficit
with
Japan
.

But
Mrs.
Hills
,
speaking
at
a
breakfast
meeting
of
the
American
Chamber
of
Commerce
in
Japan
on
Saturday
,
stressed
that
the
objective
``
is
not
to
get
definitive
action
by
spring
or
summer
,
it
is
rather
to
have
a
blueprint
for
action
.
''

She
added
that
she
expected
``
perhaps
to
have
a
down
payment
...
some
small
step
to
convince
the
American
people
and
the
Japanese
people
that
we
're
moving
in
earnest
.
''

How
such
remarks
translate
into
policy
wo
n't
become
clear
for
months
.

American
and
Japanese
officials
offered
several
theories
for
the
difference
in
approach
betwen
Mr.
Mosbacher
and
Mrs.
Hills
.

Many
called
it
simply
a
contrast
in
styles
.

But
some
saw
it
as
a
classic
negotiating
tactic
.

Others
said
the
Bush
administration
may
feel
the
rhetoric
on
both
sides
is
getting
out
of
hand
.

And
some
said
it
reflected
the
growing
debate
in
Washington
over
pursuing
free
trade
with
Japan
versus
some
kind
of
managed
trade
.

Asked
to
compare
her
visit
to
Mr.
Mosbacher
's
,
Mrs.
Hills
replied
:
``
I
did
n't
hear
every
word
he
spoke
,
but
as
a
general
proposition
,
I
think
we
have
a
very
consistent
trade
strategy
in
the
Bush
administration
.
''

Yet
more
than
one
American
official
who
sat
in
with
her
during
three
days
of
talks
with
Japanese
officials
said
her
tone
often
was
surprisingly
``
conciliatory
.
''

``
I
think
my
line
has
been
very
consistent
,
''
Mrs.
Hills
said
at
a
news
conference
Saturday
afternoon
.

``
I
am
painted
sometimes
as
ferocious
,
perhaps
because
I
have
a
ferocious
list
of
statutes
to
implement
.

I
do
n't
feel
very
ferocious
.

I
do
n't
feel
either
hard
or
soft
.

I
feel
committed
to
the
program
of
opening
markets
and
expanding
trade
.
''

When
she
met
the
local
press
for
the
first
time
on
Friday
,
Mrs.
Hills
firmly
reiterated
the
need
for
progress
in
removing
barriers
to
trade
in
forest
products
,
satellites
and
supercomputers
,
three
areas
targeted
under
the
Super
301
provision
of
the
1988
trade
bill
.

She
highlighted
exclusionary
business
practices
that
the
U.S.
government
has
identified
.

But
her
main
thrust
was
to
promote
the
importance
of
world-wide
free
trade
and
open
competition
.

She
said
the
trade
imbalance
was
mainly
due
to
macroeconomic
factors
and
should
n't
be
tackled
by
setting
quantitative
targets
.

At
her
news
conference
for
Japanese
reporters
,
one
economics
journalist
summed
up
the
Japanese
sense
of
relief
.

``
My
impression
was
that
you
would
be
a
scary
old
lady
,
''
he
said
,
drawing
a
few
nervous
chuckles
from
his
colleagues
.

``
But
I
am
relieved
to
see
that
you
are
beautiful
and
gentle
and
intelligent
and
a
person
of
integrity
.
''

Mrs.
Hills
'
remarks
did
raise
questions
,
at
least
among
some
U.S.
officials
,
about
what
exactly
her
stance
is
on
U.S.
access
to
the
Japanese
semiconductor
market
.

The
U.S.
share
of
the
Japanese
market
has
been
stuck
around
10
%
for
years
.

Many
Americans
have
interpreted
a
1986
agreement
as
assuring
U.S.
companies
a
20
%
share
by
1991
,
but
the
Japanese
have
denied
making
any
such
promise
.

At
one
of
her
news
conferences
,
Mrs.
Hills
said
,
``
I
believe
we
can
do
much
better
than
20
%
.
''

But
she
stressed
,
``
I
am
against
managed
trade
.

I
will
not
enter
into
an
agreement
that
stipulates
to
a
percentage
of
the
market
.

Traditional
Industries
Inc.
said
it
expects
to
report
a
net
loss
for
the
fourth
quarter
that
ended
June
30
and
is
seeking
new
financing
.

The
seller
of
photographic
products
and
services
said
it
is
considering
a
number
of
financing
alternatives
,
including
seeking
increases
in
its
credit
lines
.

Traditional
declined
to
estimate
the
amount
of
the
loss
and
would
n't
say
if
it
expects
to
show
a
profit
for
the
year
.

In
the
year
ended
June
30
,
1988
,
Traditional
reported
net
income
of
$
4.9
million
,
or
$
1.21
a
share
.

The
company
did
n't
break
out
its
fourth-quarter
results
.

In
the
latest
nine
months
net
income
was
$
4.7
million
,
or
$
1.31
a
share
,
on
revenue
of
$
44.3
million
.

Separately
,
the
company
said
it
would
file
a
delayed
fiscal-year
report
with
the
Securities
and
Exchange
Commission
``
within
approximately
45
days
.
''

It
said
the
delay
resulted
from
difficulties
in
resolving
its
accounting
of
a
settlement
with
the
Federal
Trade
Commission
.

Under
an
agreement
filed
in
federal
court
in
August
to
settle
FTC
objections
to
some
Traditional
sales
practices
,
Traditional
said
it
would
establish
a
$
250,000
trust
fund
to
provide
refunds
to
certain
customers
.

Information
International
Inc.
said
it
was
sued
by
a
buyer
of
its
computerized
newspaper-publishing
system
,
alleging
that
the
company
failed
to
correct
deficiencies
in
the
system
.

A
spokesman
for
Information
International
said
the
lawsuit
by
two
units
of
Morris
Communications
Corp.
seeks
restitution
of
the
system
's
about
$
3
million
purchase
price
and
cancellation
of
a
software
license
provided
by
the
Morris
units
to
Information
International
for
alleged
failure
to
pay
royalties
.

Information
International
said
it
believes
that
the
complaints
,
filed
in
federal
court
in
Georgia
,
are
without
merit
.

Closely
held
Morris
Communications
is
based
in
Augusta
,
Ga
.

The
units
that
filed
the
suit
are
Southeastern
Newspapers
Corp.
and
Florida
Publishing
Co
.

Syms
Corp.
completed
the
sale
of
its
A.
Sulka
&
Co.
subsidiary
,
a
men
's
luxury
haberdashery
,
to
Luxco
Investments
.

Terms
were
n't
disclosed
.

As
Syms
's
``
core
business
of
off-price
retailing
grows
,
a
small
subsidiary
that
is
operationally
unrelated
becomes
a
difficult
distraction
,
''
said
Marcy
Syms
,
president
of
the
parent
,
in
a
statement
.

A
spokeswoman
said
Sulka
operates
a
total
of
seven
stores
in
the
U.S.
and
overseas
.

Syms
operates
25
off-price
apparel
stores
in
the
U.S.
.

The
oil
industry
's
middling
profits
could
persist
through
the
rest
of
the
year
.

Major
oil
companies
in
the
next
few
days
are
expected
to
report
much
less
robust
earnings
than
they
did
for
the
third
quarter
a
year
ago
,
largely
reflecting
deteriorating
chemical
prices
and
gasoline
profitability
.

The
gasoline
picture
may
improve
this
quarter
,
but
chemicals
are
likely
to
remain
weak
,
industry
executives
and
analysts
say
,
reducing
chances
that
profits
could
equal
their
year-earlier
performance
.

The
industry
is
``
seeing
a
softening
somewhat
in
volume
and
certainly
in
price
in
petrochemicals
,
''
Glenn
Cox
,
president
of
Phillips
Petroleum
Co.
,
said
in
an
interview
.

``
That
change
will
obviously
impact
third
and
fourth
quarter
earnings
''
for
the
industry
in
general
,
he
added
.

He
did
n't
forecast
Phillips
's
results
.

But
securities
analysts
say
Phillips
will
be
among
the
companies
hard-hit
by
weak
chemical
prices
and
will
probably
post
a
drop
in
third-quarter
earnings
.

So
,
too
,
many
analysts
predict
,
will
Exxon
Corp.
,
Chevron
Corp.
and
Amoco
Corp
.

Typical
is
what
happened
to
the
price
of
ethylene
,
a
major
commodity
chemical
produced
in
vast
amounts
by
many
oil
companies
.

It
has
plunged
13
%
since
July
to
around
26
cents
a
pound
.

A
year
ago
ethylene
sold
for
33
cents
,
peaking
at
about
34
cents
last
December
.

A
big
reason
for
the
chemical
price
retreat
is
overexpansion
.

Beginning
in
mid-1987
,
prices
began
accelerating
as
a
growing
U.S.
economy
and
the
weak
dollar
spurred
demand
.

Companies
added
capacity
furiously
.

Now
,
greatly
increased
supplies
are
on
the
market
,
while
the
dollar
is
stronger
,
and
domestic
economic
growth
is
slower
.

Third-quarter
profits
from
gasoline
were
weaker
.

``
Refining
margins
were
so
good
in
the
third
quarter
of
last
year
and
generally
not
very
good
this
year
,
''
said
William
Randol
,
a
securities
analyst
at
First
Boston
Corp
.

Oil
company
refineries
ran
flat
out
to
prepare
for
a
robust
holiday
driving
season
in
July
and
August
that
did
n't
materialize
.

The
excess
supply
pushed
gasoline
prices
down
in
that
period
.

In
addition
,
crude
oil
prices
were
up
some
from
a
year
earlier
,
further
pressuring
profitability
.

Refiners
say
margins
picked
up
in
September
,
and
many
industry
officials
believe
gasoline
profits
will
rebound
this
quarter
,
though
still
not
to
the
level
of
1988
's
fourth
quarter
.

During
the
1988
second
half
,
many
companies
posted
record
gasoline
and
chemical
profits
.

Crude
oil
production
may
turn
out
to
be
the
most
surprising
element
of
companies
'
earnings
this
year
.

Prices
--
averaging
roughly
$
2
a
barrel
higher
in
the
third
quarter
than
a
year
earlier
--
have
stayed
well
above
most
companies
'
expectations
.

Demand
has
been
much
stronger
than
anticipated
,
and
it
typically
accelerates
in
the
fourth
quarter
.

``
We
could
see
higher
oil
prices
this
year
,
''
said
Bryan
Jacoboski
,
an
analyst
at
PaineWebber
Inc
.

That
will
translate
into
sharply
higher
production
profits
,
particularly
compared
with
last
year
when
oil
prices
steadily
fell
to
below
$
13
a
barrel
in
the
fourth
quarter
.

While
oil
prices
have
been
better
than
expected
,
natural
gas
prices
have
been
worse
.

In
the
third
quarter
,
they
averaged
about
5
%
less
than
they
were
in
1988
.

The
main
reason
remains
weather
.

Last
summer
was
notable
for
a
heat
wave
and
drought
that
caused
utilities
to
burn
more
natural
gas
to
feed
increased
electrical
demand
from
air
conditioning
use
.

This
summer
,
on
the
other
hand
,
had
milder
weather
than
usual
.

``
We
've
been
very
disappointed
in
the
performance
of
natural
gas
prices
,
''
said
Mr.
Cox
,
Phillips
's
president
.

``
The
lagging
gas
price
is
not
going
to
assist
fourth
quarter
performance
as
many
had
expected
.
''

Going
into
the
fourth
quarter
,
natural
gas
prices
are
anywhere
from
8
%
to
17
%
lower
than
a
year
earlier
.

For
instance
,
natural
gas
currently
produced
along
the
Gulf
Coast
is
selling
on
the
spot
market
for
around
$
1.47
a
thousand
cubic
feet
,
down
13
%
from
$
1.69
a
thousand
cubic
feet
a
year
ago
.

The
Bush
administration
,
trying
to
blunt
growing
demands
from
Western
Europe
for
a
relaxation
of
controls
on
exports
to
the
Soviet
bloc
,
is
questioning
whether
Italy
's
Ing
.
C.
Olivetti
&
Co.
supplied
militarily
valuable
technology
to
the
Soviets
.

Most
of
the
Western
European
members
of
Coordinating
Committee
on
Multilateral
Export
Controls
,
the
unofficial
forum
through
which
the
U.S.
and
its
allies
align
their
export-control
policies
,
are
expected
to
argue
for
more
liberal
export
rules
at
a
meeting
to
be
held
in
Paris
Oct.
25
and
26
.

They
plan
to
press
specifically
for
a
relaxation
of
rules
governing
exports
of
machine
tools
,
computers
and
other
high-technology
products
.

But
the
Bush
administration
says
it
wants
to
see
evidence
that
all
Cocom
members
are
complying
fully
with
existing
export-control
procedures
before
it
will
support
further
liberalization
.

To
make
its
point
,
it
is
challenging
the
Italian
government
to
explain
reports
that
Olivetti
may
have
supplied
the
Soviet
Union
with
sophisticated
computer-driven
devices
that
could
be
used
to
build
parts
for
combat
aircraft
.

The
London
Sunday
Times
,
which
first
reported
the
U.S.
concerns
,
cited
a
U.S.
intelligence
report
as
the
source
of
the
allegations
that
Olivetti
exported
$
25
million
in
``
embargoed
,
state-of-the-art
,
flexible
manufacturing
systems
to
the
Soviet
aviation
industry
.
''

Olivetti
reportedly
began
shipping
these
tools
in
1984
.

A
State
Department
spokesman
acknowledged
that
the
U.S.
is
discussing
the
allegations
with
the
Italian
government
and
Cocom
,
but
declined
to
confirm
any
details
.

Italian
President
Francesco
Cossiga
promised
a
quick
investigation
into
whether
Olivetti
broke
Cocom
rules
.

President
Bush
called
his
attention
to
the
matter
during
the
Italian
leader
's
visit
here
last
week
.

Olivetti
has
denied
that
it
violated
Cocom
rules
,
asserting
that
the
reported
shipments
were
properly
licensed
by
the
Italian
authorities
.

Although
the
legality
of
these
sales
is
still
an
open
question
,
the
disclosure
could
n't
be
better
timed
to
support
the
position
of
export-control
hawks
in
the
Pentagon
and
the
intelligence
community
.

``
It
seems
to
me
that
a
story
like
this
breaks
just
before
every
important
Cocom
meeting
,
''
said
a
Washington
lobbyist
for
a
number
of
U.S.
computer
companies
.

The
Bush
administration
has
sent
conflicting
signals
about
its
export-control
policies
,
reflecting
unhealed
divisions
among
several
competing
agencies
.

Last
summer
,
Mr.
Bush
moved
the
administration
in
the
direction
of
gradual
liberalization
when
he
told
a
North
Atlantic
Treaty
Organization
meeting
that
he
would
allow
some
exceptions
to
the
Cocom
embargo
of
strategic
goods
.

But
more
recently
,
the
Pentagon
and
the
Commerce
Department
openly
feuded
over
the
extent
to
which
Cocom
should
liberalize
exports
of
personal
computers
to
the
bloc
.

However
,
these
agencies
generally
agree
that
the
West
should
be
cautious
about
any
further
liberalization
.

``
There
's
no
evidence
that
the
Soviet
program
to
(
illegally
)
acquire
Western
technology
has
diminished
,
''
said
a
State
Department
spokesman
.

Salomon
Brothers
International
Ltd.
,
a
British
subsidiary
of
Salomon
Inc.
,
announced
it
will
issue
warrants
on
shares
of
Hong
Kong
Telecommunications
Ltd
.

The
move
closely
follows
a
similar
offer
by
Salomon
of
warrants
for
shares
of
Hongkong
&
Shanghai
Banking
Corp
.

Under
the
latest
offer
,
HK$
62.5
million
(
US$
8
million
)
of
three-year
warrants
will
be
issued
in
London
,
each
giving
buyers
the
right
to
buy
one
Hong
Kong
Telecommunications
share
at
a
price
to
be
determined
Friday
.

The
50
million
warrants
will
be
priced
at
HK$
1.25
each
and
are
expected
to
carry
a
premium
to
the
share
price
of
about
26
%
.

In
trading
on
the
Stock
Exchange
of
Hong
Kong
,
the
shares
closed
Wednesday
at
HK$
4.80
each
.

At
this
price
,
the
shares
would
have
to
rise
above
HK$
6.05
for
subscribers
to
Salomon
's
issue
to
profitably
convert
their
warrants
.

While
Hong
Kong
companies
have
in
the
past
issued
warrants
on
their
own
shares
,
Salomon
's
warrants
are
the
first
here
to
be
issued
by
a
third
party
.

Salomon
will
``
cover
''
the
warrants
by
buying
sufficient
shares
,
or
options
to
purchase
shares
,
to
cover
its
entire
position
.

Bankers
said
warrants
for
Hong
Kong
stocks
are
attractive
because
they
give
foreign
investors
,
wary
of
volatility
in
the
colony
's
stock
market
,
an
opportunity
to
buy
shares
without
taking
too
great
a
risk
.

The
Hong
Kong
Telecommunications
warrants
should
be
attractive
to
buyers
in
Europe
,
the
bankers
added
,
because
the
group
is
one
of
a
handful
of
blue-chip
stocks
on
the
Hong
Kong
market
that
has
international
appeal
.

Financial
Corp.
of
Santa
Barbara
filed
suit
against
former
stock
speculator
Ivan
F.
Boesky
and
Drexel
Burnham
Lambert
Inc.
,
charging
they
defrauded
the
thrift
by
concealing
their
relationship
when
persuading
it
to
buy
$
284
million
in
high-yield
,
high-risk
junk
bonds
.

In
a
suit
filed
in
federal
court
Thursday
,
the
S&L
alleged
that
a
``
disproportionate
number
''
of
the
bonds
it
purchased
in
1984
declined
in
value
.

Financial
Corp.
purchased
the
bonds
,
the
suit
alleged
,
after
Mr.
Boesky
and
Drexel
negotiated
an
agreement
for
Vagabond
Hotels
to
purchase
a
51
%
stake
in
the
thrift
for
about
$
34
million
.

Vagabond
Hotels
was
controlled
by
Mr.
Boesky
,
who
currently
is
serving
a
prison
term
for
securities
violations
.

Officials
at
Drexel
said
they
had
n't
seen
the
suit
and
thus
could
n't
comment
.

In
addition
to
$
33
million
compensatory
damages
,
the
suit
seeks
$
100
million
in
punitive
damages
.

Also
named
in
the
suit
is
Ivan
F.
Boesky
Corp.
and
Northview
Corp.
,
the
successor
company
to
Vagabonds
Hotels
.

Northview
officials
could
n't
be
located
.

Financial
Corp.
said
it
agreed
to
buy
the
bonds
after
a
representative
of
Ivan
F.
Boesky
Corp.
visited
it
in
November
1983
and
said
Financial
Corp.
could
improve
its
financial
condition
by
purchasing
the
bonds
.

Shortly
before
the
visit
,
Mr.
Boesky
and
Drexel
representives
had
met
with
Financial
Corp.
officials
and
had
signed
a
letter
of
intent
to
acquire
the
51
%
stake
in
the
company
.

However
,
the
agreement
was
canceled
in
June
1984
.

Financial
Corp.
purchased
the
bonds
in
at
least
70
different
transactions
in
1984
and
since
then
has
realized
$
11
million
in
losses
on
them
,
the
company
said
.

Ideal
Basic
Industries
Inc.
said
its
directors
reached
an
agreement
in
principle
calling
for
HOFI
North
America
Inc.
to
combine
its
North
American
cement
holdings
with
Ideal
in
a
transaction
that
will
leave
Ideal
's
minority
shareholders
with
12.8
%
of
the
combined
company
.

HOFI
,
the
North
American
holding
company
of
Swiss
concern
Holderbank
Financiere
Glaris
Ltd.
,
previously
proposed
combining
its
100
%
stake
in
St.
Lawrence
Cement
Inc.
and
its
60
%
stake
in
Dundee
Cement
Co.
with
its
67
%
stake
in
Ideal
.

But
HOFI
's
first
offer
would
have
given
Ideal
's
other
shareholders
about
10
%
of
the
combined
company
.

Ideal
's
directors
rejected
that
offer
,
although
they
said
they
endorsed
the
merger
proposal
.

Under
the
agreement
,
HOFI
will
own
87.2
%
of
the
combined
company
.

Ideal
's
current
operations
will
represent
about
39.2
%
of
the
combined
company
.

The
transaction
is
subject
to
a
definitive
agreement
and
approval
by
Ideal
shareholders
.

Ideal
said
it
expects
to
complete
the
transaction
early
next
year
.

While
corn
and
soybean
prices
have
slumped
well
below
their
drought-induced
peaks
of
1988
,
wheat
prices
remain
stubbornly
high
.

And
they
're
likely
to
stay
that
way
for
months
to
come
,
analysts
say
.

For
one
thing
,
even
with
many
farmers
planting
more
winter
wheat
this
year
than
last
,
tight
wheat
supplies
are
likely
to
support
prices
well
into
1990
,
the
analysts
say
.

And
if
rain
does
n't
fall
soon
across
many
of
the
Great
Plains
'
wheat-growing
areas
,
yields
in
the
crop
now
being
planted
could
be
reduced
,
further
squeezing
supplies
.

Also
supporting
prices
are
expectations
that
the
Soviet
Union
will
place
substantial
buying
orders
over
the
next
few
months
.

By
next
May
31
,
stocks
of
U.S.
wheat
to
be
carried
over
into
the
next
season
--
before
the
winter
wheat
now
being
planted
is
harvested
--
are
projected
to
drop
to
443
million
bushels
.

That
would
be
the
lowest
level
since
the
early
1970s
.

Stocks
were
698
million
bushels
on
May
31
of
this
year
.

In
response
to
dwindling
domestic
supplies
,
Agriculture
Secretary
Clayton
Yeutter
last
month
said
the
U.S.
government
would
slightly
increase
the
number
of
acres
farmers
can
plant
in
wheat
for
next
year
and
still
qualify
for
federal
support
payments
.

The
government
estimates
that
the
new
plan
will
boost
production
next
year
by
about
66
million
bushels
.

It
now
estimates
production
for
next
year
at
just
under
2.6
billion
bushels
,
compared
with
this
year
's
estimated
2.04
billion
and
a
drought-stunted
1.81
billion
in
1988
.

But
the
full
effect
on
prices
of
the
winter
wheat
now
being
planted
wo
n't
be
felt
until
the
second
half
of
next
year
.

Until
then
,
limited
stocks
are
likely
to
keep
prices
near
the
$
4-a-bushel
level
,
analysts
say
.

On
the
Chicago
Board
of
Trade
Friday
,
wheat
for
December
delivery
settled
at
$
4.0675
a
bushel
,
unchanged
.

In
theory
at
least
,
tight
supplies
next
spring
could
leave
the
wheat
futures
market
susceptible
to
a
supply-demand
squeeze
,
said
Daniel
Basse
,
a
futures
analyst
with
AgResource
Co.
in
Chicago
.

Such
a
situation
can
wreak
havoc
,
as
was
shown
by
the
emergency
that
developed
in
soybean
futures
trading
this
summer
on
the
Chicago
Board
of
Trade
.

In
July
,
the
CBOT
ordered
Ferruzzi
Finanziaria
S.p
.
A.
to
liquidate
futures
positions
equal
to
about
23
million
bushels
of
soybeans
.

The
exchange
said
it
feared
that
some
members
would
n't
be
able
to
find
enough
soybeans
to
deliver
and
would
have
to
default
on
their
contractual
obligation
to
the
Italian
conglomerate
,
which
had
refused
requests
to
reduce
its
holdings
.

Ferruzzi
has
denied
it
was
trying
to
manipulate
the
soybean
futures
market
.

Unseasonably
hot
,
dry
weather
across
large
portions
of
the
Great
Plains
and
in
wheat-growing
areas
in
Washington
and
Oregon
is
threatening
to
reduce
the
yield
from
this
season
's
winter
wheat
crop
,
said
Conrad
Leslie
,
a
futures
analyst
and
head
of
Leslie
Analytical
in
Chicago
.

For
example
,
in
the
Oklahoma
panhandle
,
40
%
or
more
of
the
topsoil
is
short
of
moisture
.

That
figure
climbs
to
about
47
%
in
wheat-growing
portions
of
Kansas
,
he
said
.

The
Soviet
Union
has
n't
given
any
clear
indication
of
its
wheat
purchase
plans
,
but
many
analysts
expect
Moscow
to
place
sizable
orders
for
U.S.
wheat
in
the
next
few
months
,
further
supporting
prices
.

``
Wheat
prices
will
increasingly
pivot
off
of
Soviet
demand
''
in
coming
weeks
,
predicted
Richard
Feltes
,
vice
president
,
research
,
for
Refco
Inc.
in
Chicago
.

Looking
ahead
to
other
commodity
markets
this
week
:

Orange
Juice
Traders
will
be
watching
to
see
how
long
and
how
far
the
price
decline
that
began
Friday
will
go
.

Late
Thursday
,
after
the
close
of
trading
,
the
market
received
what
would
normally
have
been
a
bullish
U.S.
Department
of
Agriculture
estimate
of
the
1989-90
Florida
orange
crop
.

It
was
near
the
low
range
of
estimates
,
at
130
million
90-pound
boxes
,
compared
with
146.6
million
boxes
last
season
.

However
,
as
expected
,
Brazil
waited
for
the
crop
estimate
to
come
out
and
then
cut
the
export
price
of
its
juice
concentrate
to
about
$
1.34
a
pound
from
around
$
1.55
.

Friday
's
consequent
selling
of
futures
contracts
erased
whatever
supportive
effect
the
U.S.
report
might
have
had
and
sent
the
November
orange
juice
contract
down
as
much
as
6.55
cents
a
pound
at
one
time
.

It
settled
with
a
loss
of
4.95
cents
at
$
1.3210
a
pound
.

Brazilian
juice
,
after
a
delay
caused
by
drought
at
the
start
of
its
crop
season
,
is
beginning
to
arrive
in
the
U.S.
in
large
quantities
.

Brazil
wants
to
stimulate
demand
for
its
product
,
which
is
going
to
be
in
plentiful
supply
.

The
price
cut
,
one
analyst
said
,
appeared
to
be
aimed
even
more
at
Europe
,
where
consumption
of
Brazilian
juice
has
fallen
.

It
's
a
dollar-priced
product
,
and
the
strong
dollar
has
made
it
more
expensive
in
Europe
,
the
analyst
said
.

New
York
futures
prices
have
dropped
significantly
from
more
than
$
2
a
pound
at
midyear
.

Barring
a
cold
snap
or
other
crop
problems
in
the
growing
areas
,
downward
pressure
on
prices
is
likely
to
continue
into
January
,
when
harvesting
and
processing
of
oranges
in
Florida
reach
their
peak
,
the
analyst
said
.

Energy

Although
some
analysts
look
for
profit-taking
in
the
wake
of
Friday
's
leap
in
crude
oil
prices
,
last
week
's
rally
is
generally
expected
to
continue
this
week
.

``
I
would
continue
to
look
for
a
stable
crude
market
,
at
least
in
futures
''
trading
,
said
William
Hinton
,
an
energy
futures
broker
with
Stotler
&
Co
.

Friday
capped
a
week
of
steadily
rising
crude
oil
prices
in
both
futures
and
spot
markets
.

On
the
New
York
Mercantile
Exchange
,
West
Texas
Intermediate
crude
for
November
delivery
finished
at
$
20.89
a
barrel
,
up
42
cents
on
the
day
.

On
European
markets
,
meanwhile
,
spot
prices
of
North
Sea
crudes
were
up
35
to
75
cents
a
barrel
.

``
This
market
still
wants
to
go
higher
,
''
said
Nauman
Barakat
,
a
first
vice
president
at
Shearson
Lehman
Hutton
Inc
.

He
predicted
that
the
November
contract
will
reach
$
21.50
a
barrel
or
more
on
the
New
York
Mercantile
Exchange
.

There
has
been
little
news
to
account
for
such
buoyancy
in
the
oil
markets
.

Analysts
generally
cite
a
lack
of
bearish
developments
as
well
as
rumors
of
a
possible
tightening
of
supplies
of
some
fuels
and
crudes
.

There
also
are
recurring
reports
that
the
Soviet
Union
is
having
difficulties
with
its
oil
exports
and
that
Nigeria
has
about
reached
its
production
limit
and
ca
n't
produce
as
much
as
it
could
sell
.

Many
traders
foresee
a
tightening
of
near-term
supplies
,
particularly
of
high-quality
crudes
such
as
those
produced
in
the
North
Sea
and
in
Nigeria
.

If
a
hostile
predator
emerges
for
Saatchi
&
Saatchi
Co.
,
co-founders
Charles
and
Maurice
Saatchi
will
lead
a
management
buy-out
attempt
,
an
official
close
to
the
company
said
.

Financing
for
any
takeover
attempt
may
be
problematic
in
the
wake
of
Friday
's
stock-market
sell-off
in
New
York
and
turmoil
in
the
junk-bond
market
.

But
the
beleaguered
British
advertising
and
consulting
giant
,
which
last
week
named
a
new
chief
executive
officer
to
replace
Maurice
Saatchi
,
has
been
the
subject
of
intense
takeover
speculation
for
weeks
.

Last
week
,
Saatchi
's
largest
shareholder
,
Southeastern
Asset
Management
,
said
it
had
been
approached
by
one
or
more
third
parties
interested
in
a
possible
restructuring
.

And
Carl
Spielvogel
,
chief
executive
officer
of
Saatchi
's
big
Backer
Spielvogel
Bates
advertising
unit
,
said
he
had
offered
to
lead
a
management
buy-out
of
the
company
,
but
was
rebuffed
by
Charles
Saatchi
.

Mr.
Spielvogel
said
he
would
n't
launch
a
hostile
bid
.

The
executive
close
to
Saatchi
&
Saatchi
said
that
``
if
a
bidder
came
up
with
a
ludicrously
high
offer
,
a
crazy
offer
which
Saatchi
knew
it
could
n't
beat
,
it
would
have
no
choice
but
to
recommend
it
to
shareholders
.

But
{
otherwise
}
it
would
undoubtedly
come
back
''
with
an
offer
by
management
.

The
executive
said
any
buy-out
would
be
led
by
the
current
board
,
whose
chairman
is
Maurice
Saatchi
and
whose
strategic
guiding
force
is
believed
to
be
Charles
Saatchi
.

Mr.
Spielvogel
is
n't
part
of
the
board
,
nor
are
any
of
the
other
heads
of
Saatchi
's
big
U.S.-based
ad
agencies
.

The
executive
did
n't
name
any
price
,
but
securities
analysts
have
said
Saatchi
would
fetch
upward
of
$
1.3
billion
.

The
executive
denied
speculation
that
Saatchi
was
bringing
in
the
new
chief
executive
officer
only
to
clean
up
the
company
financially
so
that
the
brothers
could
lead
a
buy-back
.

That
speculation
abounded
Friday
as
industry
executives
analyzed
the
appointment
of
the
new
chief
executive
,
Robert
Louis-Dreyfus
,
who
joins
Saatchi
and
becomes
a
member
of
its
board
on
Jan.
1
.

Mr.
Louis-Dreyfus
,
formerly
chief
executive
of
the
pharmaceutical
research
firm
IMS
International
Inc.
,
has
a
reputation
as
a
savvy
financial
manager
,
and
will
be
charged
largely
with
repairing
Saatchi
's
poor
financial
state
.

Asked
about
the
speculation
that
Mr.
Louis-Dreyfus
has
been
hired
to
pave
the
way
for
a
buy-out
by
the
brothers
,
the
executive
replied
,
``
That
is
n't
the
reason
Dreyfus
has
been
brought
in
.

He
was
brought
in
to
turn
around
the
company
.
''

Separately
,
several
Saatchi
agency
clients
said
they
believe
the
company
's
management
shakeup
will
have
little
affect
on
them
.

``
It
has
n't
had
any
impact
on
us
,
nor
do
we
expect
it
to
,
''
said
a
spokeswoman
for
Miller
Brewing
Co.
,
a
major
client
of
Backer
Spielvogel
.

John
Lampe
,
director
of
advertising
at
PaineWebber
Inc.
,
a
Saatchi
&
Saatchi
Advertising
client
,
said
:
``
We
have
no
problem
with
the
announcement
,
because
we
do
n't
know
what
change
it
's
going
to
bring
about
.

We
are
n't
going
to
change
agencies
because
of
a
change
in
London
.
''

Executives
at
Backer
Spielvogel
client
Avis
Inc.
,
as
well
as
at
Saatchi
client
Philips
Lighting
Co.
,
also
said
they
saw
no
effect
.

Executives
at
Prudential-Bache
Securities
Inc.
,
a
Backer
Spielvogel
client
that
is
reviewing
its
account
,
declined
comment
.

Mr.
Spielvogel
had
said
that
Prudential-Bache
was
prepared
to
finance
either
a
management
buy-out
and
restructuring
,
or
a
buy-out
of
Backer
Spielvogel
alone
,
led
by
him
.

Ad
Notes
...
.

NEW
ACCOUNT
:

California
's
Glendale
Federal
Bank
awarded
its
$
12
million
to
$
15
million
account
to
the
Los
Angeles
office
of
Omnicom
Group
's
BBDO
agency
.

The
account
was
previously
handled
by
Davis
,
Ball
&
Colombatto
Advertising
Inc.
,
a
Los
Angeles
agency
.

ACCOUNT
REVIEW
:

Royal
Crown
Cola
Co.
has
ended
its
relationship
with
the
Boston
office
of
Hill
,
Holliday
,
Connors
,
Cosmopulos
.

The
account
had
billed
about
$
6
million
in
1988
,
according
to
Leading
National
Advertisers
.

NOT-GUILTY
PLEA
:

As
expected
,
Young
&
Rubicam
Inc.
along
with
two
senior
executives
and
a
former
employee
,
pleaded
not
guilty
in
federal
court
in
New
Haven
,
Conn.
,
to
conspiracy
and
racketeering
charges
.

The
government
has
charged
that
they
bribed
Jamaican
officials
to
win
the
Jamaica
Tourist
Board
ad
account
in
1981
.

A
spokesman
for
the
U.S.
Attorney
's
office
said
extradition
proceedings
are
``
just
beginning
''
for
the
other
two
defendants
in
the
case
,
Eric
Anthony
Abrahams
,
former
Jamaican
tourism
minister
,
and
Jamaican
businessman
Arnold
Foote
Jr
.

KOREAN
AGENCY
:

The
Samsung
Group
and
Bozell
Inc.
agreed
to
establish
a
joint
venture
advertising
agency
in
South
Korea
.

Bozell
Cheil
Corp.
,
as
the
new
agency
will
be
called
,
will
be
based
in
Seoul
and
is
70
%
owned
by
Samsung
and
30
%
owned
by
Bozell
.

Samsung
already
owns
Korea
First
Advertising
Co.
,
that
country
's
largest
agency
.

Bozell
joins
Backer
Spielvogel
Bates
and
Ogilvy
Group
as
U.S.
agencies
with
interests
in
Korean
agencies
.

Citing
a
payment
from
a
supplier
and
strong
sales
of
certain
data-storage
products
,
Maxtor
Corp.
said
earnings
and
revenue
jumped
in
its
second
quarter
ended
Sept.
24
.

The
maker
of
computer-data-storage
products
said
net
income
rose
to
$
4.8
million
,
or
23
cents
a
share
,
from
year-earlier
net
of
$
1.1
million
,
or
five
cents
a
share
.

Revenue
soared
to
$
117
million
from
$
81.5
million
.

Maxtor
said
its
results
were
boosted
by
$
2
million
in
payments
received
from
a
supplier
,
for
a
certain
line
of
products
that
Maxtor
is
n't
going
to
sell
anymore
.

Maxtor
said
effects
from
discontinuing
the
line
may
have
a
positive
effect
on
future
earnings
and
revenue
.

A
spokeswoman
would
n't
elaborate
,
but
the
company
said
the
discontinued
product
has
never
been
a
major
source
of
revenue
or
profit
.

Operationally
,
Maxtor
benefited
from
robust
sales
of
products
that
store
data
for
high-end
personal
computers
and
computer
workstations
.

In
the
fiscal
first
half
,
net
was
$
7
million
,
or
34
cents
a
share
,
up
from
the
year-earlier
$
3.1
million
,
or
15
cents
a
share
.

Revenue
rose
to
$
225.5
million
from
$
161.8
million
.

Robert
G.
Walden
,
62
years
old
,
was
elected
a
director
of
this
provider
of
advanced
technology
systems
and
services
,
increasing
the
board
to
eight
members
.

He
retired
as
senior
vice
president
,
finance
and
administration
,
and
chief
financial
officer
of
the
company
Oct.
1
.

Southmark
Corp.
said
that
it
filed
part
of
its
10-K
report
with
the
Securities
and
Exchange
Commission
,
but
that
the
filing
does
n't
include
its
audited
financial
statements
and
related
information
.

The
real
estate
and
thrift
concern
,
operating
under
bankruptcy-law
proceedings
,
said
it
told
the
SEC
it
could
n't
provide
financial
statements
by
the
end
of
its
first
extension
``
without
unreasonable
burden
or
expense
.
''

The
company
asked
for
a
15-day
extension
Sept.
30
,
when
the
financial
reports
were
due
.

Southmark
said
it
plans
to
amend
its
10K
to
provide
financial
results
as
soon
as
its
audit
is
completed
.

Alan
Seelenfreund
,
52
years
old
,
was
named
chairman
of
this
processor
of
prescription
claims
,
succeeding
Thomas
W.
Field
Jr.
,
55
,
who
resigned
last
month
.

Mr.
Field
also
had
been
chairman
of
McKesson
Corp.
,
resigning
that
post
after
a
dispute
with
the
board
over
corporate
strategy
.

Mr.
Seelenfreund
is
executive
vice
president
and
chief
financial
officer
of
McKesson
and
will
continue
in
those
roles
.

PCS
also
named
Rex
R.
Malson
,
57
,
executive
vice
president
at
McKesson
,
as
a
director
,
filling
the
seat
vacated
by
Mr.
Field
.

Messrs.
Malson
and
Seelenfreund
are
directors
of
McKesson
,
which
has
an
86
%
stake
in
PCS
.

MedChem
Products
Inc.
said
a
U.S.
District
Court
in
Boston
ruled
that
a
challenge
by
MedChem
to
the
validity
of
a
U.S.
patent
held
by
Pharmacia
Inc.
was
``
without
merit
.
''

Pharmacia
,
based
in
Upsala
,
Sweden
,
had
charged
in
a
lawsuit
against
MedChem
that
MedChem
's
AMVISC
product
line
infringes
on
the
Pharmacia
patent
.

The
patent
is
related
to
hyaluronic
acid
,
a
rooster-comb
extract
used
in
eye
surgery
.

In
its
lawsuit
,
Pharmacia
is
seeking
unspecified
damages
and
a
preliminary
injunction
to
block
MedChem
from
selling
the
AMVISC
products
.

A
MedChem
spokesman
said
the
products
contribute
about
a
third
of
MedChem
's
sales
and
10
%
to
20
%
of
its
earnings
.

In
the
year
ended
Aug.
31
,
1988
,
MedChem
earned
$
2.9
million
,
or
72
cents
a
share
,
on
sales
of
$
17.4
million
.

MedChem
said
the
court
's
ruling
was
issued
as
part
of
a
``
first-phase
trial
''
in
the
patent-infringement
proceedings
and
concerns
only
one
of
its
defenses
in
the
case
.

It
said
it
is
considering
``
all
of
its
options
in
light
of
the
decision
,
including
a
possible
appeal
.
''

The
medical-products
company
added
that
it
plans
to
``
assert
its
other
defenses
''
against
Pharmacia
's
lawsuit
,
including
the
claim
that
it
has
n't
infringed
on
Pharmacia
's
patent
.

MedChem
said
that
the
court
scheduled
a
conference
for
next
Monday
--
to
set
a
date
for
proceedings
on
Pharmacia
's
motion
for
a
preliminary
injunction
.

Newspaper
publishers
are
reporting
mixed
third-quarter
results
,
aided
by
favorable
newsprint
prices
and
hampered
by
flat
or
declining
advertising
linage
,
especially
in
the
Northeast
.

Adding
to
unsteadiness
in
the
industry
,
seasonal
retail
ad
spending
patterns
in
newspapers
have
been
upset
by
shifts
in
ownership
and
general
hardships
within
the
retail
industry
.

In
New
York
,
the
Bonwit
Teller
and
B.
Altman
&
Co.
department
stores
have
filed
for
protection
from
creditors
under
Chapter
11
of
the
federal
Bankruptcy
Code
,
while
the
R.H.
Macy
&
Co.
,
Bloomingdale
's
and
Saks
Fifth
Avenue
department-store
chains
are
for
sale
.

Many
papers
throughout
the
country
are
also
faced
with
a
slowdown
in
classified-ad
spending
,
a
booming
category
for
newspapers
in
recent
years
.

Until
recently
,
industry
analysts
believed
decreases
in
retail
ad
spending
had
bottomed
out
and
would
in
fact
increase
in
this
year
's
third
and
fourth
quarters
.

All
bets
are
off
,
analysts
say
,
because
of
the
shifting
ownership
of
the
retail
chains
.

``
Improved
paper
prices
will
help
offset
weakness
in
linage
,
but
the
retailers
'
problems
have
affected
the
amount
of
ad
linage
they
usually
run
,
''
said
Edward
J.
Atorino
,
industry
analyst
for
Salomon
Brothers
Inc
.

``
Retailers
are
just
in
disarray
.
''

For
instance
,
Gannett
Co.
posted
an
11
%
gain
in
net
income
,
as
total
ad
pages
dropped
at
USA
Today
,
but
advertising
revenue
rose
because
of
a
higher
circulation
rate
base
and
increased
rates
.

Gannett
's
83
daily
and
35
non-daily
newspapers
reported
a
3
%
increase
in
advertising
and
circulation
revenue
.

Total
advertising
linage
was
``
modestly
''
lower
as
classified-ad
volume
increased
,
while
there
was
``
softer
demand
''
for
retail
and
national
ad
linage
,
said
John
Curley
,
Gannett
's
chief
executive
officer
.

At
USA
Today
,
ad
pages
totaled
785
for
the
quarter
,
down
9.2
%
from
the
1988
period
,
which
was
helped
by
increased
ad
spending
from
the
Summer
Olympics
.

While
USA
Today
's
total
paid
ad
pages
for
the
year
to
date
totaled
2,735
,
a
decrease
of
4
%
from
last
year
,
the
paper
's
ad
revenue
increased
8
%
in
the
quarter
and
13
%
in
the
nine
months
.

In
the
nine
months
,
Gannett
's
net
rose
9.5
%
to
$
270
million
,
or
$
1.68
a
share
,
from
$
247
million
,
or
$
1.52
a
share
.

Revenue
gained
6
%
to
$
2.55
billion
from
$
2.4
billion
.

At
Dow
Jones
&
Co.
,
third-quarter
net
income
fell
9.9
%
from
the
year-earlier
period
.

Net
fell
to
$
28.8
million
,
or
29
cents
a
share
,
from
$
32
million
,
or
33
cents
a
share
.

The
year-earlier
period
included
a
one-time
gain
of
$
3.5
million
,
or
four
cents
a
share
.

Revenue
gained
5.3
%
to
$
404.1
million
from
$
383.8
million
.

The
drop
in
profit
reflected
,
in
part
,
continued
softness
in
financial
advertising
at
The
Wall
Street
Journal
and
Barron
's
magazine
.

Ad
linage
at
the
Journal
fell
6.1
%
in
the
third
quarter
.

Affiliated
Publications
Inc.
reversed
a
year-earlier
third
quarter
net
loss
.

The
publisher
of
the
Boston
Globe
reported
net
of
$
8.5
million
,
or
12
cents
a
share
,
compared
with
a
loss
of
$
26.5
million
,
or
38
cents
a
share
,
for
the
third
quarter
in
1988
.

William
O.
Taylor
,
the
parent
's
chairman
and
chief
executive
officer
,
said
earnings
continued
to
be
hurt
by
softness
in
ad
volume
at
the
Boston
newspaper
.

Third-quarter
profit
estimates
for
several
companies
are
being
strongly
affected
by
the
price
of
newsprint
,
which
in
the
last
two
years
has
had
several
price
increases
.

After
a
supply
crunch
caused
prices
to
rise
14
%
since
1986
to
$
650
a
metric
ton
,
analysts
are
encouraged
,
because
they
do
n't
expect
a
price
increase
for
the
rest
of
this
year
.

Companies
with
daily
newspapers
in
the
Northeast
will
need
the
stable
newsprint
prices
to
ease
damage
from
weak
ad
linage
.

Mr.
Atorino
at
Salomon
Brothers
said
he
estimates
that
Times
Mirror
Co.
's
earnings
were
down
for
the
third
quarter
,
because
of
soft
advertising
levels
at
its
Long
Island
Newsday
and
Hartford
Courant
newspapers
.

Trouble
on
the
East
Coast
was
likely
offset
by
improved
ad
linage
at
the
Los
Angeles
Times
,
which
this
week
also
unveiled
a
redesign
.

New
York
Times
Co.
is
expected
to
report
lower
earnings
for
the
third
quarter
because
of
continued
weak
advertising
levels
at
its
flagship
New
York
Times
and
deep
discounting
of
newsprint
at
its
affiliate
,
Forest
Products
Group
.

``
Times
Co.
's
regional
daily
newspapers
are
holding
up
well
,
but
there
is
little
sign
that
things
will
improve
in
the
New
York
market
,
''
said
Alan
Kassan
,
an
analyst
with
Shearson
Lehman
Hutton
.

Washington
Post
Co.
is
expected
to
report
improved
earnings
,
largely
because
of
increased
cable
revenue
and
publishing
revenue
helped
by
an
improved
retail
market
in
the
Washington
area
.

According
to
analysts
,
profits
were
also
helped
by
successful
cost-cutting
measures
at
Newsweek
.

The
news-weekly
has
faced
heightened
competition
from
rival
Time
magazine
and
a
relatively
flat
magazine
advertising
market
.

Knight-Ridder
Inc.
is
faced
with
continued
uncertainty
over
the
pending
joint
operating
agreement
between
its
Detroit
Free
Press
and
Gannett
's
Detroit
News
,
and
has
told
analysts
that
earnings
were
down
in
the
third
quarter
.

However
,
analysts
point
to
positive
advertising
spending
at
several
of
its
major
daily
newspapers
,
such
as
the
Miami
Herald
and
San
Jose
Mercury
News
.

``
The
Miami
market
is
coming
back
strong
after
a
tough
couple
of
years
''
when
Knight-Ridder
``
was
starting
up
a
Hispanic
edition
and
circulation
was
falling
,
''
said
Bruce
Thorp
,
an
analyst
for
Provident
National
Bank
.

General
Motors
Corp.
,
in
a
series
of
moves
that
angered
union
officials
in
the
U.S.
and
Canada
,
has
signaled
that
as
many
as
five
North
American
assembly
plants
may
not
survive
the
mid-1990s
as
the
corporation
struggles
to
cut
its
excess
vehicle-making
capacity
.

In
announcements
to
workers
late
last
week
,
GM
effectively
signed
death
notices
for
two
full-sized
van
assembly
plants
,
and
cast
serious
doubt
on
the
futures
of
three
U.S.
car
factories
.

GM
is
under
intense
pressure
to
close
factories
that
became
unprofitable
as
the
giant
auto
maker
's
U.S.
market
share
skidded
during
the
past
decade
.

The
company
,
currently
using
about
80
%
of
its
North
American
vehicle
capacity
,
has
vowed
it
will
run
at
100
%
of
capacity
by
1992
.

Just
a
month
ago
,
GM
announced
it
would
make
an
aging
assembly
plant
in
Lakewood
,
Ga.
,
the
eighth
U.S.
assembly
facility
to
close
since
1987
.

Now
,
GM
appears
to
be
stepping
up
the
pace
of
its
factory
consolidation
to
get
in
shape
for
the
1990s
.

One
reason
is
mounting
competition
from
new
Japanese
car
plants
in
the
U.S.
that
are
pouring
out
more
than
one
million
vehicles
a
year
at
costs
lower
than
GM
can
match
.

Another
is
that
United
Auto
Workers
union
officials
have
signaled
they
want
tighter
no-layoff
provisions
in
the
new
Big
Three
national
contract
that
will
be
negotiated
next
year
.

GM
officials
want
to
get
their
strategy
to
reduce
capacity
and
the
work
force
in
place
before
those
talks
begin
.

The
problem
,
however
,
is
that
GM
's
moves
are
coming
at
a
time
when
UAW
leaders
are
trying
to
silence
dissidents
who
charge
the
union
is
too
passive
in
the
face
of
GM
layoffs
.

Against
that
backdrop
,
UAW
Vice
President
Stephen
P.
Yokich
,
who
recently
became
head
of
the
union
's
GM
department
,
issued
a
statement
Friday
blasting
GM
's
``
flagrant
insensitivity
''
toward
union
members
.

The
auto
maker
's
decision
to
let
word
of
the
latest
shutdowns
and
product
reassignments
trickle
out
in
separate
communiques
to
the
affected
plants
showed
``
disarray
''
and
an
``
inability
or
unwillingness
to
provide
consistent
information
,
''
Mr.
Yokich
said
.

GM
officials
told
workers
late
last
week
of
the
following
moves
:
Production
of
full-sized
vans
will
be
consolidated
into
a
single
plant
in
Flint
,
Mich
.

That
means
two
plants
--
one
in
Scarborough
,
Ontario
,
and
the
other
in
Lordstown
,
Ohio
--
probably
will
be
shut
down
after
the
end
of
1991
.

The
shutdowns
will
idle
about
3,000
Canadian
assembly
workers
and
about
2,500
workers
in
Ohio
.

Robert
White
,
Canadian
Auto
Workers
union
president
,
used
the
impending
Scarborough
shutdown
to
criticize
the
U.S.-Canada
free
trade
agreement
and
its
champion
,
Prime
Minister
Brian
Mulroney
.

But
Canadian
auto
workers
may
benefit
from
a
separate
GM
move
that
affects
three
U.S.
car
plants
and
one
in
Quebec
.

Workers
at
plants
in
Van
Nuys
,
Calif.
,
Oklahoma
City
and
Pontiac
,
Mich.
,
were
told
their
facilities
are
no
longer
being
considered
to
build
the
next
generation
of
the
Pontiac
Firebird
and
Chevrolet
Camaro
muscle
cars
.

GM
is
studying
whether
it
can
build
the
new
Camaro-Firebird
profitably
at
a
plant
in
St.
Therese
,
Quebec
,
company
and
union
officials
said
.

That
announcement
left
union
officials
in
Van
Nuys
and
Oklahoma
City
uncertain
about
their
futures
.

The
Van
Nuys
plant
,
which
employs
about
3,000
workers
,
does
n't
have
a
product
to
build
after
1993
.

Jerry
Shrieves
,
UAW
local
president
,
said
the
facility
was
asked
to
draw
up
plans
to
continue
working
as
a
``
flex
plant
,
''
which
could
build
several
different
types
of
products
on
short
notice
to
satisfy
demand
.

At
the
Oklahoma
City
plant
,
which
employs
about
6,000
workers
building
the
eight-year-old
A-body
mid-sized
cars
,
Steve
Featherston
,
UAW
local
vice
president
,
said
the
plant
has
no
new
product
lined
up
,
and
``
none
of
us
knows
''
when
the
A-body
cars
will
die
.

He
said
he
believes
GM
has
plans
to
keep
building
A-body
cars
into
the
mid-1990s
.

At
Pontiac
,
however
,
the
Camaro-Firebird
decision
appears
to
erase
UAW
hopes
that
GM
would
reopen
the
shuttered
assembly
plant
that
last
built
the
plastic-bodied
,
two-seater
Pontiac
Fiero
model
.

The
Fiero
plant
was
viewed
as
a
model
of
union-management
cooperation
at
GM
before
slow
sales
of
the
Fiero
forced
the
company
to
close
the
factory
last
year
.

Union
officials
have
taken
a
beating
politically
as
a
result
.

Dissident
UAW
members
have
used
the
Fiero
plant
as
a
symbol
of
labor-management
cooperation
's
failure
.

Institut
Merieux
S.A.
of
France
said
the
Canadian
government
raised
an
obstacle
to
its
proposed
acquisition
of
Connaught
BioSciences
Inc.
for
942
million
Canadian
dollars
(
US$
801.6
million
)
.

Merieux
said
the
government
's
minister
of
industry
,
science
and
technology
told
it
that
he
was
n't
convinced
that
the
purchase
is
likely
to
be
of
``
net
benefit
''
to
Canada
.

Canadian
investment
rules
require
that
big
foreign
takeovers
meet
that
standard
.

The
French
company
said
the
government
gave
it
30
days
in
which
to
submit
information
to
further
support
its
takeover
plan
.

Both
Merieux
and
Connaught
are
biotechnology
research
and
vaccine
manufacturing
concerns
.

The
government
's
action
was
unusual
.

Alan
Nymark
,
executive
vice
president
of
Investment
Canada
,
which
oversees
foreign
takeovers
,
said
it
marked
the
first
time
in
its
four-year
history
that
the
agency
has
made
an
adverse
net-benefit
decision
about
the
acquisition
of
a
publicly
traded
company
.

He
said
it
has
reached
the
same
conclusions
about
some
attempts
to
buy
closely
held
concerns
,
but
eventually
allowed
those
acquisitions
to
proceed
.

``
This
is
n't
a
change
in
government
policy
;
this
provision
has
been
used
before
,
''
said
Jodi
Redmond
,
press
secretary
for
Harvie
Andre
,
Canada
's
minister
of
industry
,
science
and
technology
.

Mr.
Andre
issued
the
ruling
based
on
a
recommendation
by
Investment
Canada
.

Spokesmen
for
Merieux
and
Connaught
said
they
had
n't
been
informed
of
specific
areas
of
concern
by
either
the
government
or
Investment
Canada
,
but
added
they
hope
to
have
more
information
early
this
week
.

Investment
Canada
declined
to
comment
on
the
reasons
for
the
government
decision
.

Viren
Mehta
,
a
partner
with
Mehta
&
Isaly
,
a
New
York-based
pharmaceutical
industry
research
firm
,
said
the
government
's
ruling
was
n't
unexpected
.

``
This
has
become
a
very
politicized
deal
,
concerning
Canada
's
only
large
,
world-class
bio-research
or
pharmaceutical
company
,
''
Mr.
Mehta
said
.

Mr.
Mehta
said
the
move
that
could
allow
the
transaction
to
go
ahead
as
planned
could
be
an
out-of-court
settlement
of
Connaught
's
dispute
with
the
University
of
Toronto
.

The
University
is
seeking
to
block
the
acquisition
of
Connaught
by
foreign
interests
,
citing
concerns
about
the
amount
of
research
that
would
be
done
in
Canada
.

The
university
is
considering
a
settlement
proposal
made
by
Connaught
.

While
neither
side
will
disclose
its
contents
,
Mr.
Mehta
expects
it
to
contain
more
specific
guarantees
on
research
and
development
spending
levels
in
Canada
than
Merieux
offered
to
Investment
Canada
.

Some
analysts
,
such
as
Murray
Grossner
of
Toronto-based
Richardson
Greenshields
Inc.
,
believe
the
government
ruling
leaves
the
door
open
for
other
bidders
,
such
as
Switzerland
's
Ciba-Geigy
and
Chiron
Corp.
of
Emeryville
,
Calif
.

Officials
for
the
two
concerns
,
which
are
bidding
C$
30
a
share
for
Connaught
,
could
n't
be
reached
for
comment
.

French
state-owned
Rhone-Poulenc
S.A.
holds
51
%
of
Merieux
.

Weatherford
International
Inc.
said
it
canceled
plans
for
a
preferred-stock
swap
but
may
resume
payment
of
dividends
on
the
stock
,
and
added
that
it
expects
to
publicly
offer
about
10
million
common
shares
.

The
company
said
it
planned
to
offer
an
undetermined
number
of
common
shares
in
exchange
for
the
585,000
shares
of
its
preferred
stock
outstanding
.

The
exchange
ratio
was
never
established
.

Weatherford
said
market
conditions
led
to
the
cancellation
of
the
planned
exchange
.

The
energy-services
concern
said
,
however
,
that
in
January
1990
,
it
may
resume
payments
of
dividends
on
the
preferred
stock
.

Weatherford
suspended
its
preferred-dividend
payment
in
October
1985
and
said
it
has
n't
any
plans
to
catch
up
on
dividends
in
arrears
about
$
6
million
,
but
will
do
so
some
time
in
the
future
.

Additionally
,
the
company
said
it
filed
with
the
Securities
and
Exchange
Commission
for
the
proposed
offering
of
10
million
shares
of
common
stock
,
expected
to
be
offered
in
November
.

The
company
said
Salomon
Brothers
Inc.
and
Howard
,
Weil
,
Labouisse
,
Friedrichs
Inc.
,
underwriters
for
the
offering
,
were
granted
an
option
to
buy
as
much
as
an
additional
1.5
million
shares
to
cover
over-allotments
.

Proceeds
will
be
used
to
eliminate
and
restructure
bank
debt
.

Weatherford
currently
has
approximately
11.1
million
common
shares
outstanding
.

Earnings
for
most
of
the
nation
's
major
pharmaceutical
makers
are
believed
to
have
moved
ahead
briskly
in
the
third
quarter
,
as
companies
with
newer
,
big-selling
prescription
drugs
fared
especially
well
.

For
the
third
consecutive
quarter
,
however
,
most
of
the
companies
'
revenues
were
battered
by
adverse
foreign-currency
translations
as
a
result
of
the
strong
dollar
abroad
.

Analysts
said
that
Merck
&
Co.
,
Eli
Lilly
&
Co.
,
Warner-Lambert
Co.
and
the
Squibb
Corp.
unit
of
Bristol-Myers
Squibb
Co.
all
benefited
from
strong
sales
of
relatively
new
,
higher-priced
medicines
that
provide
wide
profit
margins
.

Less
robust
earnings
at
Pfizer
Inc.
and
Upjohn
Co.
were
attributed
to
those
companies
'
older
products
,
many
of
which
face
stiffening
competition
from
generic
drugs
and
other
medicines
.

Joseph
Riccardo
,
an
analyst
with
Bear
,
Stearns
&
Co.
,
said
that
over
the
past
few
years
most
drug
makers
have
shed
their
slow-growing
businesses
and
instituted
other
cost
savings
,
such
as
consolidating
manufacturing
plants
and
administrative
staffs
.

As
a
result
,
``
major
new
products
are
having
significant
impact
,
even
on
a
company
with
very
large
revenues
,
''
Mr.
Riccardo
said
.

Analysts
said
profit
for
the
dozen
or
so
big
drug
makers
,
as
a
group
,
is
estimated
to
have
climbed
between
11
%
and
14
%
.

While
that
's
not
spectacular
,
Neil
Sweig
,
an
analyst
with
Prudential
Bache
,
said
that
the
rate
of
growth
will
``
look
especially
good
as
compared
to
other
companies
if
the
economy
turns
downward
.
''

Mr.
Sweig
estimated
that
Merck
's
profit
for
the
quarter
rose
by
about
22
%
,
propelled
by
sales
of
its
line-up
of
fast-growing
prescription
drugs
,
including
its
anti-cholesterol
drug
,
Mevacor
;
a
high
blood
pressure
medicine
,
Vasotec
;
Primaxin
,
an
antibiotic
,
and
Pepcid
,
an
anti-ulcer
medication
.

Profit
climbed
even
though
Merck
's
sales
were
reduced
by
``
one
to
three
percentage
points
''
as
a
result
of
the
strong
dollar
,
Mr.
Sweig
said
.

In
the
third
quarter
of
1988
,
Merck
earned
$
311.8
million
,
or
79
cents
a
share
.

In
Rahway
,
N.J.
,
a
Merck
spokesman
said
the
company
does
n't
make
earnings
projections
.

Mr.
Sweig
said
he
estimated
that
Lilly
's
earnings
for
the
quarter
jumped
about
20
%
,
largely
because
of
the
performance
of
its
new
anti-depressant
Prozac
.

The
drug
,
introduced
last
year
,
is
expected
to
generate
sales
of
about
$
300
million
this
year
.

``
It
's
turning
out
to
be
a
real
blockbuster
,
''
Mr.
Sweig
said
.

In
last
year
's
third
quarter
,
Lilly
earned
$
171.4
million
,
or
$
1.20
a
share
.

In
Indianapolis
,
Lilly
declined
comment
.

Several
analysts
said
they
expected
Warner-Lambert
's
profit
also
to
increase
by
more
than
20
%
from
$
87.7
million
,
or
$
1.25
a
share
,
it
reported
in
the
like
period
last
year
.

The
company
is
praised
by
analysts
for
sharply
lowering
its
costs
in
recent
years
and
shedding
numerous
companies
with
low
profit
margins
.

The
company
's
lean
operation
,
analysts
said
,
allowed
sharp-rising
sales
from
its
cholesterol
drug
,
Lopid
,
to
power
earnings
growth
.

Lopid
sales
are
expected
to
be
about
$
300
million
this
year
,
up
from
$
190
million
in
1988
.

In
Morris
Plains
,
N.J.
,
a
spokesman
for
the
company
said
the
analysts
'
projections
are
``
in
the
ballpark
.
''

Squibb
's
profit
,
estimated
by
analysts
to
be
about
18
%
above
the
$
123
million
,
or
$
1.25
a
share
,
it
earned
in
the
third
quarter
of
1988
,
was
the
result
of
especially
strong
sales
of
its
Capoten
drug
for
treating
high
blood
pressure
and
other
heart
disease
.

The
company
was
officially
merged
with
Bristol-Myers
Co.
earlier
this
month
.

Bristol-Myers
declined
to
comment
.

Mr.
Riccardo
of
Bear
Stearns
said
that
Schering-Plough
Corp.
's
expected
profit
rise
of
about
18
%
to
20
%
,
and
Bristol-Meyers
's
expected
profit
increase
of
about
13
%
are
largely
because
``
those
companies
are
really
managed
well
.
''

ScheringPlough
earned
$
94.4
million
,
or
84
cents
a
share
,
while
Bristol-Myers
earned
$
232.3
million
,
or
81
cents
a
share
,
in
the
like
period
a
year
earlier
.

In
Madison
,
N.J.
,
a
spokesman
for
Schering-Plough
said
the
company
has
``
no
problems
''
with
the
average
estimate
by
a
analysts
that
third-quarter
earnings
per
share
rose
by
about
19
%
,
to
$
1
.

The
company
expects
to
achieve
the
20
%
increase
in
full-year
earnings
per
share
,
as
it
projected
in
the
spring
,
the
spokesman
said
.

Meanwhile
,
analysts
said
Pfizer
's
recent
string
of
lackluster
quarterly
performances
continued
,
as
earnings
in
the
quarter
were
expected
to
decline
by
about
5
%
.

Sales
of
Pfizer
's
important
drugs
,
Feldene
for
treating
arthritis
,
and
Procardia
,
a
heart
medicine
,
have
shrunk
because
of
increased
competition
.

``
The
(
strong
)
dollar
hurt
Pfizer
a
lot
,
too
,
''
Mr.
Sweig
said
.

In
the
third
quarter
last
year
,
Pfizer
earned
$
216.8
million
,
or
$
1.29
a
share
.

In
New
York
,
the
company
declined
comment
.

Analysts
said
they
expected
Upjohn
's
profit
to
be
flat
or
rise
by
only
about
2
%
to
4
%
as
compared
with
$
89.6
million
,
or
49
cents
a
share
,
it
earned
a
year
ago
.

Upjohn
's
biggest-selling
drugs
are
Xanax
,
a
tranquilizer
,
and
Halcion
,
a
sedative
.

Sales
of
both
drugs
have
been
hurt
by
new
state
laws
restricting
the
prescriptions
of
certain
tranquilizing
medicines
and
adverse
publicity
about
the
excessive
use
of
the
drugs
.

Also
,
the
company
's
hair-growing
drug
,
Rogaine
,
is
selling
well
--
at
about
$
125
million
for
the
year
,
but
the
company
's
profit
from
the
drug
has
been
reduced
by
Upjohn
's
expensive
print
and
television
campaigns
for
advertising
,
analysts
said
.

In
Kalamazoo
,
Mich.
,
Upjohn
declined
comment
.

Amid
a
crowd
of
crashing
stocks
,
Relational
Technology
Inc.
's
stock
fell
particularly
hard
Friday
,
dropping
23
%
because
its
problems
were
compounded
by
disclosure
of
an
unexpected
loss
for
its
fiscal
first
quarter
.

The
database
software
company
said
it
expects
a
$
2
million
net
loss
for
the
fiscal
first
quarter
ended
Sept.
30
.

It
said
analysts
had
been
expecting
a
small
profit
for
the
period
.

Revenue
is
expected
to
be
``
up
modestly
''
from
the
$
26.5
million
reported
a
year
ago
.

Relational
Technology
reported
net
income
of
$
1.5
million
,
or
12
cents
a
share
,
in
the
year-earlier
period
.

``
While
our
international
operations
showed
strong
growth
,
our
domestic
business
was
substantially
below
expectations
,
''
said
Paul
Newton
,
president
and
chief
executive
officer
.

A
spokesman
said
the
company
's
first
quarter
is
historically
soft
,
and
computer
companies
in
general
are
experiencing
slower
sales
.

Mr.
Newton
said
he
accepted
the
resignation
of
Thomas
Wilson
,
vice
president
of
corporate
sales
,
and
that
his
marketing
responsibilities
have
been
reassigned
.

The
company
said
Mr.
Wilson
's
resignation
was
n't
related
to
the
sales
shortfall
.

Relational
Technology
went
public
in
May
1988
at
$
14
a
share
.

It
fell
$
1.875
a
share
Friday
,
to
$
6.25
,
a
new
low
,
in
over-the-counter
trading
.

Its
high
for
the
past
year
was
$
16.375
a
share
.

In
the
previous
quarter
,
the
company
earned
$
4.5
million
,
or
37
cents
a
share
,
on
sales
of
$
47.2
million
.

The
Bronx
has
a
wonderful
botanical
garden
,
a
great
zoo
,
its
own
charming
Little
Italy
(
on
Arthur
Avenue
)
and
,
of
course
,
the
Yankees
.

However
,
most
people
,
having
been
subjected
to
news
footage
of
the
devastated
South
Bronx
,
look
at
the
borough
the
way
Tom
Wolfe
's
Sherman
McCoy
did
in
``
Bonfire
of
the
Vanities
''
--
as
a
wrong
turn
into
hell
.

But
Laura
Cunningham
's
Bronx
,
her
childhood
Bronx
of
the
'50s
,
is
something
else
altogether
.

In
a
lovely
,
novelistic
memoir
,
``
Sleeping
Arrangements
''
(
Knopf
,
195
pages
,
$
18.95
)
,
she
remembers
an
exotic
playground
,
peopled
mainly
by
Jewish
eccentrics
and
the
occasional
Catholic
(
real
oddballs
like
her
sexpot
friend
,
the
hell-kitten
Diana
,
age
five
)
.

Ms.
Cunningham
,
a
novelist
and
playwright
,
has
a
vivid
and
dramatically
outsized
sense
of
recall
.

She
transforms
her
``
Bronx
of
the
emotions
,
a
place
where
the
flats
of
mediocrity
are
only
relieved
by
steep
descents
into
hysteria
''
into
the
``
Babylonian
Bronx
,
''
a
world
simmering
with
sex
and
death
and
intrigue
.

In
the
Babylonian
Bronx
,
Jewish
working-class
people
lived
in
drab
,
Soviet-style
buildings
``
glamorized
''
with
names
like
AnaMor
Towers
(
after
owners
Anna
and
Morris
Snezak
)
,
whose
lobbies
and
hallways
were
decorated
with
murals
of
ancient
Syrians
and
Greeks
,
friezes
of
Pompeii
.

For
Ms.
Cunningham
the
architectural
discombobulation
matched
the
discrepancy
she
felt
living
in
the
AnaMor
Towers
as
a
little
girl
:
``
...
outwardly
ordinary
,
inwardly
ornate
,
owing
all
inspiration
to
heathen
cultures
.
''

Sharp-witted
and
funny
but
never
mean
,
she
's
a
memorialist
a
bit
like
Truman
Capote
,
if
he
'd
been
Jewish
and
female
and
less
bitchy
.

Little
Lily
,
as
Ms.
Cunningham
calls
herself
in
the
book
,
really
was
n't
ordinary
.

She
was
raised
,
for
the
first
eight
years
,
by
her
mother
,
Rosie
,
whom
she
remembers
as
a
loving
liar
,
who
realigned
history
to
explain
why
Lily
's
father
did
n't
live
with
them
.

Rosie
reinvented
this
man
,
who
may
or
may
not
have
known
about
his
child
,
as
a
war
hero
for
Lily
's
benefit
.

Rosie
died
young
and
Lily
has
remembered
her
as
a
romantic
figure
,
who
did
n't
interfere
much
with
her
child
's
education
on
the
streets
.

The
games
Bronx
children
played
(
holding
kids
down
and
stripping
them
,
for
example
)
seem
tame
by
today
's
crack
standards
,
but
Ms.
Cunningham
makes
it
all
sound
like
a
great
adventure
.

``
Without
official
knowledge
of
sex
or
death
,
we
flirted
with
both
,
''
she
writes
.

She
analyzed
families
by
their
sleeping
arrangements
.

Her
friend
Susan
,
whose
parents
kept
reminding
her
she
was
unwanted
,
slept
on
a
narrow
bed
wedged
into
her
parents
'
bedroom
,
as
though
she
were
a
temporary
visitor
.

Her
friend
Diana
's
father
was
a
professional
thief
;
they
did
n't
seem
to
have
any
bedrooms
at
all
.

Maybe
Lily
became
so
obsessed
with
where
people
slept
and
how
because
her
own
arrangements
kept
shifting
.

When
Rosie
died
,
her
uncles
moved
in
--
and
let
her
make
the
sleeping
and
other
household
arrangements
.

They
painted
the
apartment
orange
,
pink
and
white
,
according
to
her
instructions
.

With
loving
detail
she
recalls
her
Uncle
Gabe
,
an
Orthodox
Jew
and
song
lyricist
(
who
rhymed
river
with
liver
in
a
love
song
)
;
and
Uncle
Len
,
a
mysterious
part-time
investigator
who
looked
like
Lincoln
and
carried
a
change
of
clothing
in
a
Manila
envelope
,
like
an
``
undercover
President
on
a
good-will
mission
.
''

They
came
by
their
strangeness
honestly
.

Lily
's
grandmother
,
no
cookie
baker
,
excised
the
heads
of
disliked
relatives
from
the
family
album
,
and
lugged
around
her
perennial
work-in-progress
,
``
Philosophy
for
Women
.
''

The
book
loses
some
momentum
toward
the
end
,
when
Lily
becomes
more
preoccupied
with
dating
boys
and
less
with
her
delightfully
weird
family
.

For
the
most
part
,
though
,
there
's
much
pleasure
in
her
saucy
,
poignant
probe
into
the
mysteries
of
the
Babylonian
Bronx
.

The
Bronx
also
figures
in
Bruce
Jay
Friedman
's
latest
novel
,
which
flashes
back
to
the
New
York
of
the
'50s
.

But
both
the
past
and
present
worlds
of
``
The
Current
Climate
''
(
Atlantic
Monthly
Press
,
200
pages
,
$
18.95
)
feel
cramped
and
static
.

For
his
sixth
novel
,
Mr.
Friedman
tried
to
resuscitate
the
protagonist
of
his
1972
work
,
``
About
Harry
Towns
.
''

Harry
is
now
a
57-year-old
writer
,
whose
continuing
flirtation
with
drugs
and
marginal
types
in
Hollywood
and
New
York
seems
quaintly
out-of-synch
.

Harry
fondly
remembers
the
``
old
''
days
of
the
early
'70s
,
when
people
like
his
friend
Travis
would
take
a
psychiatrist
on
a
date
to
analyze
what
Travis
was
doing
wrong
.

``
An
L.A.
solution
,
''
explains
Mr.
Friedman
.

Line
by
line
Mr.
Friedman
's
weary
cynicism
can
be
amusing
,
especially
when
he
's
riffing
on
the
Hollywood
social
scheme
--
the
way
people
size
each
other
up
,
immediately
canceling
the
desperate
ones
who
merely
almost
made
it
.

Harry
has
avoided
all
that
by
living
in
a
Long
Island
suburb
with
his
wife
,
who
's
so
addicted
to
soap
operas
and
mystery
novels
she
barely
seems
to
notice
when
her
husband
disappears
for
drug-seeking
forays
into
Manhattan
.

But
it
does
n't
take
too
many
lines
to
figure
Harry
out
.

He
's
a
bore
.

Gulf
Resources
&
Chemical
Corp.
said
it
agreed
to
pay
$
1.5
million
as
part
of
an
accord
with
the
Environmental
Protection
Agency
regarding
an
environmental
cleanup
of
a
defunct
smelter
the
company
formerly
operated
in
Idaho
.

In
1984
the
EPA
notified
Gulf
Resources
,
which
was
a
part-owner
of
the
smelter
,
that
it
was
potentially
liable
for
sharing
cleanup
costs
at
the
site
under
the
federal
Superfund
program
.

The
21-square-mile
area
is
contaminated
with
lead
,
zinc
and
other
metals
.

Gulf
Resources
earlier
this
year
proposed
a
reorganization
plan
that
would
make
it
a
unit
of
a
Bermuda
concern
,
potentially
exempting
it
from
liability
for
the
smelter
's
cleanup
costs
.

The
company
said
that
as
part
of
its
agreement
with
the
EPA
,
it
``
made
certain
voluntary
undertakings
with
respect
to
intercorporate
transactions
entered
into
after
the
reorganization
.
''

The
company
,
which
issued
a
statement
on
the
agreement
late
Friday
,
said
that
$
1
million
of
the
payment
was
previously
provided
for
in
its
financial
statements
and
that
$
500,000
will
be
recognized
in
its
1989
third-quarter
statement
.

The
agreement
and
consent
decree
are
subject
to
court
approval
,
the
company
said
.

Gulf
Resources
added
that
it
``
will
seek
to
recover
equitable
contribution
from
others
for
both
the
amount
of
the
settlement
and
any
other
liabilities
it
may
incur
under
the
Superfund
law
.
''

Under
the
agreement
,
Gulf
must
give
the
U.S.
government
45
days
'
advance
written
notice
before
issuing
any
dividends
on
common
stock
.

The
company
's
net
worth
can
not
fall
below
$
185
million
after
the
dividends
are
issued
.

``
The
terms
of
that
agreement
only
become
effective
the
date
of
Gulf
's
reorganization
,
which
we
anticipate
will
occur
sometime
in
early
1990
,
''
said
Lawrence
R.
Mehl
,
Gulf
's
general
counsel
.

In
addition
,
Gulf
must
give
the
government
20
days
'
advance
written
notice
of
any
loans
exceeding
$
50
million
that
are
made
to
the
Bermuda-based
holding
company
.

Gulf
's
net
worth
after
those
transaction
must
be
at
least
$
150
million
.

Separately
,
the
company
said
it
expects
to
hold
a
special
meeting
for
shareholders
in
early
1990
to
vote
on
its
proposed
reorganization
.

Many
of
the
nation
's
highest-ranking
executives
saluted
Friday
's
market
plunge
as
an
overdue
comeuppance
for
speculators
and
takeover
players
.

Assuming
that
the
market
does
n't
head
into
a
bottomless
free
fall
,
some
executives
think
Friday
's
action
could
prove
a
harbinger
of
good
news
--
as
a
sign
that
the
leveraged
buy-out
and
takeover
frenzy
of
recent
years
may
be
abating
.

``
This
is
a
reaction
to
artificial
LBO
valuations
,
rather
than
to
any
fundamentals
,
''
said
John
Young
,
chairman
of
Hewlett-Packard
Co.
,
whose
shares
dropped
$
3.125
to
$
48.125
.

``
If
we
get
rid
of
a
lot
of
that
nonsense
,
it
will
be
a
big
plus
.
''

A
few
of
the
executives
here
for
the
fall
meeting
of
the
Business
Council
,
a
group
that
meets
to
discuss
national
issues
,
were
only
too
happy
to
personalize
their
criticism
.

``
People
wish
the
government
would
do
something
about
leveraged
buy-outs
,
do
something
about
takeovers
,
do
something
about
Donald
Trump
,
''
said
Rand
Araskog
,
chairman
of
ITT
Corp.
,
whose
stock
dropped
$
3.375
.

``
Where
's
the
leadership
?

Where
's
the
guy
who
can
say
:
`
Enough
is
enough
'
''
?

The
executives
were
remarkably
unperturbed
by
the
plunge
even
though
it
lopped
billions
of
dollars
off
the
value
of
their
companies
--
and
millions
off
their
personal
fortunes
.

``
I
'm
not
going
to
worry
about
one
day
's
decline
,
''
said
Kenneth
Olsen
,
Digital
Equipment
Corp.
president
,
who
was
leisurely
strolling
through
the
bright
orange
and
yellow
leaves
of
the
mountains
here
after
his
company
's
shares
plunged
$
5.75
to
close
at
$
86.50
.

``
I
did
n't
bother
calling
anybody
;
I
did
n't
even
turn
on
TV
.
''

``
There
has
n't
been
any
fundamental
change
in
the
economy
,
''
added
John
Smale
,
whose
Procter
&
Gamble
Co.
took
an
$
8.75
slide
to
close
at
$
120.75
.

``
The
fact
that
this
happened
two
years
ago
and
there
was
a
recovery
gives
people
some
comfort
that
this
wo
n't
be
a
problem
.
''

Of
course
,
established
corporate
managements
often
tend
to
applaud
the
setbacks
of
stock
speculators
and
takeover
artists
.

Indeed
,
one
chief
executive
who
was
downright
delighted
by
Friday
's
events
was
Robert
Crandall
,
chairman
of
AMR
Corp.
,
the
parent
of
American
Airlines
and
the
target
of
a
takeover
offer
by
Mr.
Trump
.

Asked
whether
Friday
's
action
could
help
him
avoid
being
Trumped
by
the
New
York
real
estate
magnate
,
Mr.
Crandall
smiled
broadly
and
said
:
``
No
comment
.
''

On
Friday
morning
,
before
the
market
's
sell-off
,
the
business
leaders
issued
a
report
predicting
the
economy
would
grow
at
roughly
an
inflation-adjusted
2
%
annual
rate
,
through
next
year
,
then
accelerate
anew
in
1991
.

Of
the
19
economists
who
worked
on
the
Business
Council
forecast
,
only
two
projected
periods
of
decline
in
the
nation
's
output
over
the
next
two
years
,
and
in
``
both
instances
the
declines
are
too
modest
to
warrant
the
phrase
recession
,
''
said
Lewis
Preston
,
chairman
of
J.P.
Morgan
&
Co.
and
vice
chairman
of
the
Business
Council
.

The
real
estate
slump
that
's
pushing
down
the
price
of
New
York
office
space
and
housing
is
also
affecting
the
city
's
retail
real
estate
market
.

In
Manhattan
,
once-desirable
store
sites
sit
vacant
and
newly
constructed
space
has
been
slow
to
fill
.

Retail
real
estate
brokers
say
tenants
are
reluctant
to
sign
leases
because
of
uncertainty
about
the
local
economy
,
turmoil
in
their
own
industries
and
a
belief
that
rents
have
not
yet
hit
bottom
.

``
There
is
an
unbelievable
amount
of
space
available
,
''
says
Faith
Consolo
,
senior
vice
president
at
Garrick-Aug
Associates
Store
Leasing
Inc
.

There
are
about
2,000
stores
for
rent
,
up
from
a
more
typical
range
of
1,200
to
1,500
.

``
This
further
confuses
retailers
,
''
she
says
.

``
They
wonder
should
they
sign
a
lease
if
prices
are
still
coming
down
?

Is
this
the
wrong
time
to
open
a
store
?

Who
is
going
to
be
in
the
space
next
door
?
''

In
addition
,
Ms.
Consolo
says
,
tenants
usually
can
negotiate
to
pay
rents
that
are
about
one-quarter
lower
than
landlords
'
initial
asking
price
.

A
handful
of
hot
retail
locations
,
such
as
the
57th
Street
and
Madison
and
Fifth
Avenue
areas
,
have
been
able
to
sustain
what
many
see
as
astronomical
rents
.

And
,
in
some
neighborhoods
,
rents
have
merely
hit
a
plateau
.

But
on
average
,
Manhattan
retail
rents
have
dropped
10
%
to
15
%
in
the
past
six
months
alone
,
experts
say
.

That
follows
a
more
subtle
decline
in
the
prior
six
months
,
after
Manhattan
rents
had
run
up
rapidly
since
1986
.

The
same
factors
limiting
demand
for
office
space
have
affected
retailing
.

``
As
businesses
contract
or
depart
,
the
number
of
employees
who
might
use
retail
services
shrinks
,
''
says
Edward
A.
Friedman
,
senior
vice
president
of
Helmsley
Spear
Inc
.

He
says
financial
problems
plaguing
electronics
,
fur
and
furniture
companies
--
key
categories
in
the
local
retail
economy
--
have
further
deflated
the
market
.

Hardest
hit
are
what
he
calls
``
secondary
''
sites
that
primarily
serve
neighborhood
residents
.

In
these
locations
,
Mr.
Friedman
says
,
``
Retailers
are
increasingly
cautious
about
expanding
and
rents
have
remained
steady
or
in
some
cases
have
declined
.
''

Weakness
in
the
restaurant
industry
,
which
is
leaving
retail
space
vacant
,
exacerbates
the
problem
for
landlords
.

It
is
also
no
comfort
to
landlords
and
small
New
York
retailers
when
the
future
of
larger
department
stores
,
which
anchor
retail
neighborhoods
,
are
in
doubt
.

Hooker
Corp.
,
parent
of
Bonwit
Teller
and
B.
Altman
's
,
is
mired
in
bankruptcy
proceedings
and
Bloomingdale
's
is
for
sale
by
its
owner
,
Campeau
Corp
.

The
trend
toward
lower
rents
may
seem
surprising
given
that
some
communities
in
New
York
are
bemoaning
the
loss
of
favorite
local
businesses
to
high
rents
.

But
,
despite
the
recent
softening
,
for
many
of
these
retailers
there
's
still
been
too
big
a
jump
from
the
rental
rates
of
the
late
1970s
,
when
their
leases
were
signed
.

Certainly
,
the
recent
drop
in
prices
does
n't
mean
Manhattan
comes
cheap
.

New
York
retail
rents
still
run
well
above
the
going
rate
in
other
U.S.
cities
.

Madison
and
Fifth
Avenues
and
East
57th
Street
can
command
rents
of
up
to
$
500
a
square
foot
,
and
$
250
is
not
uncommon
.

The
thriving
34th
Street
area
offers
rents
of
about
$
100
a
square
foot
,
as
do
up-and-coming
locations
along
lower
Fifth
Avenue
.

By
contrast
,
rentals
in
the
best
retail
locations
in
Boston
,
San
Francisco
and
Chicago
rarely
top
$
100
a
square
foot
.

And
rents
on
Beverly
Hills
'
Rodeo
Drive
generally
do
n't
exceed
about
$
125
a
square
foot
.

The
New
York
Stock
Exchange
said
two
securities
will
begin
trading
this
week
.

Precision
Castparts
Corp.
,
Portland
,
Ore.
,
will
begin
trading
with
the
symbol
PCP
.

It
makes
investment
castings
and
has
traded
over-the-counter
.

Royal
Bank
of
Scotland
Group
PLC
,
an
Edinburgh
,
Scotland
,
financial
services
company
,
will
list
American
depositary
shares
,
representing
preferred
shares
,
with
the
symbol
RBSPr
.

It
will
continue
to
trade
on
the
International
Stock
Exchange
,
London
.

The
American
Stock
Exchange
listed
shares
of
two
companies
.

AIM
Telephones
Inc.
,
a
Parsippany
,
N.J.
,
telecommunications
equipment
supply
company
,
started
trading
with
the
symbol
AIM
.

It
had
traded
over-the-counter
.

Columbia
Laboratories
Inc.
,
Miami
,
began
trading
with
the
symbol
COB
.

The
pharmaceuticals
maker
had
traded
over-the-counter
.

The
National
Market
System
of
the
Nasdaq
over-the-counter
market
listed
shares
of
one
company
.

Employee
Benefit
Plans
Inc.
,
a
Minneapolis
health-care
services
company
,
was
listed
with
the
symbol
EBPI
.

When
Justice
William
Brennan
marks
the
start
of
his
34th
year
on
the
Supreme
Court
today
,
the
occasion
will
differ
sharply
from
previous
anniversaries
of
his
tenure
.

For
the
first
time
,
the
83-year-old
justice
finds
his
influence
almost
exclusively
in
dissent
,
rather
than
as
a
force
in
the
high
court
's
majority
.

This
role
reversal
holds
true
,
as
well
,
for
his
three
liberal
and
moderate
allies
,
Justices
Thurgood
Marshall
,
Harry
Blackmun
and
John
Stevens
.

But
are
these
four
players
,
three
of
them
in
their
80s
,
ready
to
assume
a
different
role
after
88
years
,
collectively
,
of
service
on
the
high
court
?

Every
indication
is
that
the
four
are
prepared
to
accept
this
new
role
,
and
the
frustrations
that
go
with
it
,
but
in
different
ways
.

Justices
Brennan
and
Stevens
appear
philosophical
about
it
;
Justices
Marshall
and
Blackmun
appear
fighting
mad
.

The
four
justices
are
no
newcomers
to
dissent
,
often
joining
forces
in
the
past
decade
to
criticize
the
court
's
conservative
drift
.

But
always
,
in
years
past
,
they
have
bucked
the
trend
and
have
been
able
to
pick
up
a
fifth
vote
to
eke
out
a
number
of
major
victories
in
civil
rights
and
liberties
cases
.

Now
,
however
,
as
the
court
's
new
five-member
conservative
majority
continues
to
solidify
,
victories
for
the
liberals
are
rare
.

The
change
is
most
dramatic
for
Justice
Brennan
,
the
last
survivor
of
the
mid-1960s
liberal
majority
under
Chief
Justice
Earl
Warren
.

In
the
seven
Supreme
Court
terms
from
the
fall
of
1962
through
the
spring
of
1967
,
the
height
of
the
Warren
Court
's
power
,
Justice
Brennan
cast
only
25
dissenting
votes
in
555
cases
decided
by
the
court
.

Last
term
alone
he
cast
52
dissenting
votes
in
133
decisions
,
with
the
contentious
flag-burning
ruling
as
his
only
big
victory
.

But
Justice
Brennan
foresaw
his
new
role
,
strongly
defending
the
importance
of
dissents
in
a
1985
speech
.

``
Each
time
the
court
revisits
an
issue
,
the
justices
will
be
forced
by
a
dissent
to
reconsider
the
fundamental
questions
and
to
rethink
the
result
,
''
he
said
.

Moreover
,
in
recent
months
he
has
said
that
when
he
was
on
the
winning
side
in
the
1960s
,
he
knew
that
the
tables
might
turn
in
the
future
.

He
has
said
that
he
now
knows
how
Justice
John
Harlan
felt
,
a
reference
to
the
late
conservative
justice
who
was
the
most
frequent
dissenter
from
the
Warren
Court
's
opinions
.

Associates
of
81-year-old
Justice
Marshall
say
he
was
``
depressed
''
about
the
court
's
direction
last
spring
,
but
is
feisty
about
his
role
and
determined
to
speak
out
against
the
court
's
cutbacks
in
civil
rights
.

``
We
could
sweep
it
under
the
rug
and
hide
it
,
but
I
'm
not
going
to
do
it
,
''
he
said
in
a
speech
last
month
.

He
,
like
Justice
Brennan
,
considers
dissents
highly
important
for
the
future
,
a
point
that
has
n't
escaped
legal
scholars
.

Harvard
Law
School
Professor
Laurence
Tribe
says
there
is
a
``
generation-skipping
''
flavor
to
current
dissents
.

The
dissenters
in
the
Warren
Court
,
he
says
,
appeared
to
be
writing
for
the
short-term
,
suggesting
that
the
court
's
direction
might
change
soon
.

``
Brennan
and
Marshall
are
speaking
in
their
dissents
to
a
more
distant
future
,
''
he
says
.

Justice
Blackmun
,
who
will
turn
81
next
month
,
also
seems
feisty
about
his
new
role
.

Associates
say
he
takes
some
defeats
more
personally
than
his
colleagues
,
especially
attempts
to
curtail
the
right
to
abortion
first
recognized
in
his
1973
opinion
,
Roe
vs.
Wade
.

Friends
and
associates
who
saw
Justice
Blackmun
during
the
summer
said
he
was
no
more
discouraged
about
the
court
than
in
recent
years
.

And
his
outlook
improved
after
successful
cataract
surgery
in
August
.

But
his
level
of
frustration
showed
in
a
recent
,
impassioned
speech
to
a
group
of
hundreds
of
lawyers
in
Chicago
.

He
concluded
his
remarks
by
quoting
,
emotionally
and
at
some
length
,
according
to
those
present
,
the
late
Martin
Luther
King
's
famous
``
I
Have
a
Dream
''
speech
from
the
1963
March
on
Washington
.

Justice
Stevens
,
69
,
is
probably
the
most
philosophical
of
the
dissenters
about
his
role
,
in
part
because
he
may
be
the
least
liberal
of
the
four
,
but
also
because
he
enjoys
the
intellectual
challenge
of
arguing
with
the
majority
more
than
the
others
.

If
the
role
these
four
dissenters
are
assuming
is
a
familiar
one
in
modern
Supreme
Court
history
,
it
also
differs
in
an
important
way
from
recent
history
,
court
watchers
say
.

``
The
dissenters
of
the
Warren
Court
were
often
defending
a
legal
legacy
that
they
inherited
,
''
says
Prof.
A.E.
Dick
Howard
of
the
University
of
Virginia
Law
School
,
``
but
the
dissenters
today
are
defending
a
legacy
that
they
created
.

The
government
sold
the
deposits
of
four
savings-and-loan
institutions
,
in
its
first
wave
of
sales
of
big
,
sick
thrifts
,
but
low
bids
prevented
the
sale
of
a
fifth
.

The
four
S&Ls
were
sold
to
large
banks
,
as
was
the
case
with
most
of
the
28
previous
transactions
initiated
by
the
Resolution
Trust
Corp.
since
it
was
created
in
the
S&L
bailout
legislation
two
months
ago
.

Two
of
the
four
big
thrifts
were
sold
to
NCNB
Corp.
,
Charlotte
,
N.C.
,
which
has
aggressively
expanded
its
markets
,
particularly
in
Texas
and
Florida
.

A
Canadian
bank
bought
another
thrift
,
in
the
first
RTC
transaction
with
a
foreign
bank
.

Under
these
deals
,
the
RTC
sells
just
the
deposits
and
the
healthy
assets
.

These
``
clean-bank
''
transactions
leave
the
bulk
of
bad
assets
,
mostly
real
estate
,
with
the
government
,
to
be
sold
later
.

In
these
four
,
for
instance
,
the
RTC
is
stuck
with
$
4.51
billion
in
bad
assets
.

Acquirers
paid
premiums
ranging
from
1.5
%
to
3.7
%
for
the
deposits
and
branch
systems
,
roughly
in
line
with
what
analysts
were
expecting
.

The
buyers
will
also
be
locked
into
deposit
rates
for
just
two
weeks
,
as
has
been
the
case
with
previous
deals
.

After
that
,
the
buyers
may
repudiate
the
rates
paid
by
the
former
thrifts
.

But
it
's
uncertain
whether
these
institutions
will
take
those
steps
.

NCNB
,
for
example
,
has
been
one
of
the
highest
rate
payers
in
the
Texas
market
,
and
in
Florida
,
rates
are
especially
sensitive
in
retirement
communities
.

The
RTC
had
previously
targeted
five
thrifts
for
quick
sales
in
order
to
spend
cash
by
certain
budgetary
deadlines
,
but
the
delays
illustrate
the
tough
chore
facing
the
agency
.

``
These
thrifts
are
beached
whales
,
''
said
Bert
Ely
,
an
industry
consultant
based
in
Alexandria
,
Va
.

For
example
,
the
delay
in
selling
People
's
Heritage
Savings
,
Salina
,
Kan.
,
with
$
1.7
billion
in
assets
,
has
forced
the
RTC
to
consider
selling
off
the
thrift
branch-by-branch
,
instead
of
as
a
whole
institution
.

NCNB
continued
its
foray
into
the
Florida
and
Texas
markets
.

NCNB
will
acquire
University
Federal
Savings
Association
,
Houston
,
which
had
assets
of
$
2.8
billion
.

NCNB
Texas
National
Bank
will
pay
the
RTC
a
premium
of
$
129
million
for
$
3.5
billion
in
deposits
.

As
a
measure
of
the
depths
to
which
the
Texas
real
estate
market
has
sunk
,
the
RTC
will
pay
$
3.8
billion
to
NCNB
to
take
$
750
million
of
bad
assets
.

NCNB
also
acquired
Freedom
Savings
&
Loan
Association
,
Tampa
,
Fla.
,
which
had
total
assets
of
$
900
million
.

NCNB
will
pay
the
RTC
a
premium
of
$
40.4
million
for
$
1.1
billion
in
deposits
.

NCNB
will
also
acquire
$
266
million
of
Freedom
's
assets
from
the
RTC
,
which
will
require
$
875
million
in
assistance
.

Meridian
Bancorp
Inc.
,
Reading
,
Pa.
,
will
acquire
Hill
Financial
Savings
Association
,
Red
Hill
,
Pa.
,
which
had
$
2.3
billion
in
assets
.

Meridian
will
pay
a
premium
of
$
30.5
million
to
assume
$
2
billion
in
deposits
.

It
will
also
purchase
$
845
million
of
the
thrift
's
assets
,
with
$
1.9
billion
in
RTC
assistance
.

In
the
first
RTC
transaction
with
a
foreign
buyer
,
Royal
Trustco
Ltd.
,
Toronto
,
will
acquire
Pacific
Savings
Bank
,
Costa
Mesa
,
Calif.
,
which
had
$
949
million
in
assets
.

Royal
Trustco
will
pay
the
RTC
$
25
million
to
assume
$
989
million
in
deposits
.

It
will
also
purchase
$
473
million
in
assets
,
and
receive
$
550
million
in
assistance
from
the
RTC
.

The
following
issues
were
recently
filed
with
the
Securities
and
Exchange
Commission
:

American
Cyanamid
Co.
,
offering
of
1,250,000
common
shares
,
via
Merrill
Lynch
Capital
Markets
.

Limited
Inc.
,
offering
of
up
to
$
300
million
of
debt
securities
and
warrants
.

Nuveen
California
Performance
Plus
Municipal
Fund
Inc.
,
initial
offering
of
five
million
common
shares
,
via
Alex
.
Brown
&
Sons
Inc.
,
John
Nuveen
&
Co.
,
Prudential-Bache
Capital
Funding
,
and
Bateman
Eichler
,
Hill
Richards
.

PacifiCare
Health
Systems
Inc.
,
proposed
offering
of
1.5
million
common
shares
,
of
which
700,000
shares
will
be
offered
by
PacifiCare
and
800,000
shares
by
UniHealth
America
Inc
.
(
PacifiCare
's
71
%
)
,
via
Dillon
,
Read
&
Co.
Inc.
,
Goldman
,
Sachs
&
Co.
and
Dean
Witter
Reynolds
Inc
.

Pricor
Inc.
,
offering
of
one
million
new
shares
of
common
stock
and
300,000
shares
by
holders
,
via
Drexel
Burnham
Lambert
Inc.
and
J.C.
Bradford
&
Co
.

Trans
World
Airlines
Inc.
,
offering
of
$
150
million
senior
notes
,
via
Drexel
Burnham
.

Time
magazine
,
in
a
move
to
reduce
the
costs
of
wooing
new
subscribers
,
is
lowering
its
circulation
guarantee
to
advertisers
for
the
second
consecutive
year
,
increasing
its
subscription
rates
and
cutting
back
on
merchandise
giveaways
.

In
an
announcement
to
its
staff
last
week
,
executives
at
Time
Warner
Inc.
's
weekly
magazine
said
Time
will
``
dramatically
de-emphasize
''
its
use
of
electronic
giveaways
such
as
telephones
in
television
subscription
drives
;
cut
the
circulation
it
guarantees
advertisers
by
300,000
,
to
four
million
;
and
increase
the
cost
of
its
annual
subscription
rate
by
about
$
4
to
$
55
.

In
a
related
development
,
the
news-weekly
,
for
the
fourth
year
in
a
row
,
said
it
wo
n't
increase
its
advertising
rates
in
1990
;
a
full
,
four-color
page
in
the
magazine
costs
about
$
120,000
.

However
,
because
the
guaranteed
circulation
base
is
being
lowered
,
ad
rates
will
be
effectively
7.5
%
higher
per
subscriber
,
according
to
Richard
Heinemann
,
Time
associate
publisher
.

Time
is
following
the
course
of
some
other
mass-circulation
magazines
that
in
recent
years
have
challenged
the
publishing
myth
that
maintaining
artificially
high
,
and
expensive
,
circulations
is
the
way
to
draw
advertisers
.

In
recent
years
,
Reader
's
Digest
,
New
York
Times
Co.
's
McCall
's
,
and
most
recently
News
Corp.
's
TV
Guide
,
have
cut
their
massive
circulation
rate
bases
to
eliminate
marginal
circulation
and
hold
down
rates
for
advertisers
.

Deep
discounts
in
subscriptions
and
offers
of
free
clock
radios
and
watches
have
become
accepted
forms
of
attracting
new
subscribers
in
the
hyper-competitive
world
of
magazine
news-weeklies
.

But
Time
,
as
part
of
the
more
cost-conscious
Time
Warner
,
wants
to
wean
itself
away
from
expensive
gimmicks
.

Besides
,
Time
executives
think
selling
a
news
magazine
with
a
clock
radio
is
tacky
.

``
Giveaways
just
give
people
the
wrong
image
,
''
said
Mr.
Heinemann
.

``
That
perception
takes
the
focus
off
the
magazine
.
''

Time
magazine
executives
predictably
paint
the
circulation
cut
as
a
show
of
strength
and
actually
a
benefit
to
advertisers
.

``
What
we
are
doing
is
screening
out
the
readers
who
are
only
casually
related
to
the
magazine
and
do
n't
really
read
it
,
''
said
Mr.
Heinemann
.

``
We
are
trying
to
create
quality
and
involvement
.
''

However
,
Time
executives
used
the
same
explanation
when
in
October
1988
the
magazine
cut
its
guaranteed
circulation
from
4.6
million
to
4.3
million
.

And
Time
's
paid
circulation
,
according
to
Audit
Bureau
of
Circulations
,
dropped
7.3
%
to
4,393,237
in
the
six
months
ended
June
30
,
1989
.

Still
,
Time
's
move
is
being
received
well
,
once
again
.

``
It
's
terrific
for
advertisers
to
know
the
reader
will
be
paying
more
,
''
said
Michael
Drexler
,
national
media
director
at
Bozell
Inc.
ad
agency
.

``
A
few
drops
in
circulation
are
of
no
consequence
.

It
's
not
a
show
of
weakness
;
they
are
improving
the
quality
of
circulation
while
insuring
their
profits
.
''

Mr.
Heinemann
said
the
changes
represent
a
new
focus
in
the
magazine
industry
:
a
magazine
's
net
revenue
per
subscriber
,
or
the
actual
revenue
from
subscribers
after
discounts
and
the
cost
of
premiums
have
been
stripped
away
.

``
The
question
is
how
much
are
we
getting
from
each
reader
,
''
said
Mr.
Heinemann
.

Time
's
rivals
news-weeklies
,
Washington
Post
Co.
's
Newsweek
and
U.S.
News
&
World
Report
,
are
less
reliant
on
electronic
giveaways
,
and
in
recent
years
both
have
been
increasing
their
circulation
rate
bases
.

Both
magazines
are
expected
to
announce
their
ad
rates
and
circulation
levels
for
1990
within
a
month
.

When
the
news
broke
of
an
attempted
coup
in
Panama
two
weeks
ago
,
Sen.
Christopher
Dodd
called
the
State
Department
for
a
briefing
.

``
They
said
,
`
follow
CNN
,
'
''
he
told
reporters
.

That
shows
how
far
Ted
Turner
's
Cable
News
Network
has
come
since
its
birth
nine
years
ago
,
when
it
was
considered
the
laughingstock
of
television
news
.

It
is
bigger
,
faster
and
more
profitable
than
the
news
divisions
of
any
of
the
three
major
broadcast
networks
.

Its
niche
as
the
``
network
of
record
''
during
major
crises
draws
elite
audiences
around
the
world
.

But
for
all
its
success
,
CNN
has
hit
a
plateau
.

Although
viewership
soars
when
big
news
breaks
,
it
ebbs
during
periods
of
calm
.

CNN
executives
worry
that
the
network
's
punchy
but
repetitive
news
format
may
be
getting
stale
and
wo
n't
keep
viewers
coming
back
as
the
alternatives
multiply
for
news
and
information
on
cable-TV
.

``
Just
the
fact
we
're
on
24
hours
is
no
longer
bulletin
,
''
says
Ed
Turner
,
CNN
's
executive
vice
president
,
news
gathering
(
and
no
relation
to
Ted
Turner
)
.

``
You
ca
n't
live
on
that
.
''

So
CNN
,
a
unit
of
Atlanta-based
Turner
Broadcasting
System
Inc.
,
is
trying
to
reposition
itself
as
a
primary
channel
,
or
what
people
in
the
television
industry
call
a
``
top
of
mind
''
network
.

Tonight
,
to
kick
off
the
effort
,
CNN
will
premiere
its
first
prime-time
newscast
in
years
,
an
hourlong
show
at
6
p.m
.
Eastern
time
to
air
head-to-head
against
the
network
newscasts
.

The
show
will
be
co-anchored
by
Bernard
Shaw
and
Catherine
Crier
,
a
34-year-old
former
Texas
judge
and
campus
beauty
queen
who
has
never
held
a
job
in
television
or
journalism
.

The
new
show
is
perhaps
the
boldest
in
a
number
of
steps
the
network
is
taking
to
build
audience
loyalty
by
shifting
away
from
its
current
format
toward
more
full-length
``
signature
''
programming
with
recognizable
stars
.

To
distinguish
itself
,
CNN
is
also
expanding
international
coverage
and
adding
a
second
global-news
program
.

It
is
paying
higher
salaries
--
after
years
of
scrimping
--
to
lure
and
keep
experienced
staffers
.

And
it
is
embarking
on
an
expensive
gamble
to
break
major
stories
with
a
large
investigative-reporting
team
.

``
The
next
stage
is
to
get
beyond
the
opinion
leaders
who
use
us
as
a
point
of
reference
to
become
a
point
of
reference
at
ordinary
dinner
tables
,
''
says
Jon
Petrovich
,
executive
vice
president
of
Headline
News
,
CNN
's
sister
network
.

But
that
wo
n't
be
easy
.

Networks
,
like
other
consumer
products
,
develop
images
in
peoples
'
minds
that
are
n't
easy
to
change
.

It
also
takes
money
that
CNN
has
been
reluctant
to
spend
to
make
programs
and
hire
talent
that
viewers
will
tune
in
specially
to
see
.

And
the
cable-TV
operators
--
CNN
's
distributors
and
part
owners
--
like
things
just
the
way
they
are
.

The
repositioning
bid
is
aimed
at
CNN
's
unsteady
viewership
--
and
what
may
happen
to
it
as
the
cable-TV
news
market
grows
more
competitive
.

Already
,
CNN
is
facing
stronger
competition
from
Financial
News
Network
Inc.
and
General
Electric
Co.
's
Consumer
News
and
Business
Channel
,
both
of
which
are
likely
to
pursue
more
general
news
in
the
future
.

In
addition
,
many
cable-TV
systems
themselves
are
airing
more
local
and
regional
news
programs
produced
by
local
broadcast
stations
.

CNN
wants
to
change
its
viewers
'
habits
.

Its
watchers
are
,
on
the
whole
,
a
disloyal
group
of
channel-zapping
``
grazers
''
and
news
junkies
,
who
spend
an
average
of
just
26
minutes
a
day
watching
CNN
,
according
to
audience
research
.

That
's
less
than
one-third
the
time
that
viewers
watch
the
major
broadcast
networks
.

The
brief
attention
viewers
give
CNN
could
put
it
at
a
disadvantage
as
ratings
data
,
and
advertising
,
become
more
important
to
cable-TV
channels
.

CNN
's
viewer
habits
have
been
molded
by
its
format
.

Its
strategy
in
the
past
has
been
to
serve
as
a
TV
wire
service
.

It
focused
on
building
up
its
news
bureaus
around
the
world
,
so
as
events
took
place
it
could
go
live
quicker
and
longer
than
other
networks
.

It
filled
its
daily
schedule
with
newscasts
called
``
Daybreak
,
''
``
Daywatch
,
''
``
Newsday
,
''
and
``
Newsnight
,
''
but
the
shows
varied
little
in
content
,
personality
or
look
.

Now
,
the
push
is
on
for
more-distinctive
shows
.

``
Our
goal
is
to
create
more
programs
with
an
individual
identity
,
''
says
Paul
Amos
,
CNN
executive
vice
president
for
programming
.

Accordingly
,
CNN
is
adding
a
world-affairs
show
in
the
morning
because
surveys
show
its
global-news
hour
in
the
afternoon
is
among
its
most
``
differentiated
''
programs
in
viewers
'
minds
,
says
Mr.
Amos
.

And
it
is
exploring
other
original
programs
,
similar
to
its
``
Larry
King
Live
''
and
``
Crossfire
''
talk
shows
,
which
executives
hope
will
keep
people
tuned
in
.

Then
there
's
``
The
World
Today
,
''
the
prime-time
newscast
featuring
Mr.
Shaw
and
Ms.
Crier
.

Until
now
,
CNN
has
featured
its
Hollywood
gossip
show
during
the
key
evening
period
.

But
70
%
of
the
cable-television-equipped
households
that
watch
news
do
so
between
6:30
p.m.
and
7
p.m.
,
the
network
discovered
,
so
CNN
wants
in
.

Mr.
Amos
says
the
Shaw-Crier
team
will
probably
do
two
live
interviews
a
day
,
with
most
of
the
program
,
at
least
for
now
,
appearing
similar
to
CNN
's
other
newcasts
.

Some
in
the
industry
are
skeptical
.

``
I
find
it
hard
to
conceive
of
people
switching
over
to
CNN
for
what
,
at
least
in
the
public
's
mind
,
is
the
same
news
,
''
says
Reuven
Frank
,
the
former
two-time
president
of
NBC
News
and
creator
of
the
Huntley-Brinkley
Report
.

The
evening
news
is
also
slated
as
CNN
's
stage
for
its
big
push
into
investigative
journalism
.

In
August
,
the
network
hired
award-winning
producer
Pamela
Hill
,
the
former
head
of
news
specials
at
ABC
.

She
's
assembling
a
staff
of
about
35
investigative
reporters
who
will
produce
weekly
,
in-depth
segments
,
with
an
eye
toward
breaking
big
stories
.

CNN
executives
hope
the
headlines
created
by
such
scoops
will
generate
excitement
for
its
``
branded
''
programs
,
in
the
way
``
60
Minutes
''
did
so
well
for
CBS
.

That
's
such
a
departure
from
the
past
that
many
in
the
industry
are
skeptical
CNN
will
follow
through
with
its
investigative
commitment
,
especially
after
it
sees
the
cost
of
producing
in-depth
pieces
.

``
They
've
never
shown
any
inclination
to
spend
money
on
production
,
''
says
Michael
Mosettig
,
a
senior
producer
with
MacNeil-Lehrer
NewsHour
,
who
notes
that
CNN
is
indispensable
to
his
job
.

The
network
's
salaries
have
always
ranged
far
below
industry
standards
,
resulting
in
a
less-experienced
work
force
.

CNN
recently
gave
most
employees
raises
of
as
much
as
15
%
,
but
they
're
still
drastically
underpaid
compared
with
the
networks
.

Says
Mr.
Mosettig
:
``
CNN
is
my
wire
service
;
they
're
on
top
of
everything
.

But
to
improve
,
they
've
really
got
to
make
the
investment
in
people
.
''

In
any
case
,
cable-TV-system
operators
have
reason
to
fear
any
tinkering
with
CNN
's
format
.

They
market
cable-TV
on
the
very
grazing
opportunities
CNN
seeks
to
discourage
.

``
We
would
obviously
be
upset
if
those
kinds
of
services
evolved
into
more
general-interest
,
long-format
programming
,
''
says
Robert
Stengel
,
senior
vice
president
,
programming
,
of
Continental
Cablevision
Inc.
,
which
holds
a
2
%
stake
in
Turner
Broadcasting
.

The
Second
U.S.
Circuit
Court
of
Appeals
opinion
in
the
Arcadian
Phosphate
case
did
not
repudiate
the
position
Pennzoil
Co.
took
in
its
dispute
with
Texaco
,
contrary
to
your
Sept.
8
article
``
Court
Backs
Texaco
's
View
in
Pennzoil
Case
--
Too
Late
.
''

The
fundamental
rule
of
contract
law
applied
to
both
cases
was
that
courts
will
not
enforce
agreements
to
which
the
parties
did
not
intend
to
be
bound
.

In
the
Pennzoil\/Texaco
litigation
,
the
courts
found
Pennzoil
and
Getty
Oil
intended
to
be
bound
;
in
Arcadian
Phosphates
they
found
there
was
no
intention
to
be
bound
.

Admittedly
,
the
principle
in
the
cases
is
the
same
.

But
the
outcome
of
a
legal
dispute
almost
always
turns
on
the
facts
.

And
the
facts
,
as
found
by
the
various
courts
in
these
two
lawsuits
,
were
different
.

When
you
suggest
otherwise
,
you
leave
the
realm
of
reporting
and
enter
the
orbit
of
speculation
.

Charles
F.
Vihon

Valley
Federal
Savings
&
Loan
Association
said
Imperial
Corp.
of
America
withdrew
from
regulators
its
application
to
buy
five
Valley
Federal
branches
,
leaving
the
transaction
in
limbo
.

The
broken
purchase
appears
as
additional
evidence
of
trouble
at
Imperial
Corp.
,
whose
spokesman
said
the
company
withdrew
its
application
from
the
federal
Office
of
Thrift
Supervision
because
of
an
informal
notice
that
Imperial
's
thrift
unit
failed
to
meet
Community
Reinvestment
Act
requirements
.

The
Community
Reinvestment
Act
requires
savings
and
loan
associations
to
lend
money
in
amounts
related
to
areas
where
deposits
are
received
.

The
transaction
,
announced
in
August
,
included
about
$
146
million
in
deposits
at
the
five
outlets
in
California
's
San
Joaquin
Valley
.

Terms
were
n't
disclosed
,
but
Valley
Federal
had
said
it
expected
to
post
a
modest
pretax
gain
and
to
save
about
$
2
million
in
operating
costs
annually
.

Valley
Federal
said
Friday
that
it
is
considering
whether
to
seek
another
buyer
for
the
branches
or
to
pursue
the
transaction
with
Imperial
Corp.
,
which
said
it
is
attempting
to
meet
Community
Reinvestment
Act
requirements
.

Valley
Federal
,
with
assets
of
$
3.3
billion
,
is
based
in
Van
Nuys
.

Imperial
Corp.
,
based
in
San
Diego
,
is
the
parent
of
Imperial
Savings
&
Loan
.

In
the
first
six
months
of
the
year
it
posted
a
net
loss
of
$
33.1
million
.

Call
it
the
``
we
're
too
broke
to
fight
''
defense
.

Lawyers
for
dozens
of
insolvent
savings
and
loan
associations
are
trying
a
new
tack
in
their
efforts
to
defuse
suits
filed
by
borrowers
,
developers
and
creditors
.

The
thrifts
'
lawyers
claim
that
the
suits
,
numbering
700
to
1,000
in
Texas
alone
,
should
be
dismissed
as
moot
because
neither
the
S&Ls
nor
the
extinct
Federal
Savings
and
Loan
Insurance
Corp.
has
the
money
to
pay
judgments
.

Though
the
argument
may
have
a
common-sense
ring
to
it
,
even
the
S&L
lawyers
concede
there
's
little
precedent
to
back
their
position
.

Still
,
one
federal
appeals
court
has
signaled
it
's
willing
to
entertain
the
notion
,
and
the
lawyers
have
renewed
their
arguments
in
Texas
and
eight
other
states
where
the
defense
is
permitted
under
state
law
.

The
dismissal
of
the
pending
suits
could
go
a
long
way
toward
clearing
court
dockets
in
Texas
and
reducing
the
FSLIC
's
massive
legal
bills
,
which
topped
$
73
million
last
year
.

The
S&L
lawyers
were
encouraged
last
month
by
an
appellate-court
ruling
in
two
cases
brought
against
defunct
Sunbelt
Savings
&
Loan
Association
of
Dallas
by
the
developers
of
the
Valley
Ranch
,
best
known
as
the
training
center
for
the
Dallas
Cowboys
football
team
.

Sunbelt
foreclosed
on
the
ranch
.

Sunbelt
and
the
FSLIC
argued
to
the
Fifth
U.S.
Circuit
Court
of
Appeals
``
that
there
will
never
be
any
assets
with
which
to
satisfy
a
judgment
against
Sunbelt
Savings
nor
any
means
to
collect
from
any
other
party
,
including
FSLIC
.
''

``
If
true
,
''
the
court
wrote
,
``
this
contention
would
justify
dismissal
of
these
actions
on
prudential
grounds
.
''

But
the
court
said
it
lacked
enough
financial
information
about
Sunbelt
and
the
FSLIC
and
sent
the
cases
back
to
federal
district
court
in
Dallas
.

Charles
Haworth
,
a
lawyer
for
Sunbelt
,
says
he
plans
to
file
a
brief
this
week
urging
the
district
judge
to
dismiss
the
suits
,
because
Sunbelt
's
liabilities
exceeded
its
assets
by
about
$
2
billion
when
federal
regulators
closed
it
in
August
1988
.

``
This
institution
is
just
brain
dead
,
''
says
Mr.
Haworth
,
a
partner
in
the
Dallas
office
of
Andrews
&
Kurth
,
a
Houston
law
firm
.

But
a
lawyer
for
Triland
Investment
Group
,
the
developer
of
Valley
Ranch
,
dismisses
such
arguments
as
a
``
defense
du
jour
.
''

Attorney
Richard
Jackson
of
Dallas
says
a
judgment
for
Triland
could
be
satisfied
in
ways
other
than
a
monetary
award
,
including
the
reversal
of
Sunbelt
's
foreclosure
on
Valley
Ranch
.

``
We
're
asking
the
court
for
a
number
of
things
he
can
grant
in
addition
to
the
thrill
of
victory
,
''
he
says
.

``
We
'd
take
the
Valley
Ranch
free
and
clear
as
a
booby
prize
.

Kenneth
J.
Thygerson
,
who
was
named
president
of
this
thrift
holding
company
in
August
,
resigned
,
citing
personal
reasons
.

Mr.
Thygerson
said
he
had
planned
to
travel
between
the
job
in
Denver
and
his
San
Diego
home
,
but
has
found
the
commute
too
difficult
to
continue
.

A
new
president
was
n't
named
.

SOUTH
AFRICA
FREED
the
ANC
's
Sisulu
and
seven
other
political
prisoners
.

Thousands
of
supporters
,
many
brandishing
flags
of
the
outlawed
African
National
Congress
,
gave
the
anti-apartheid
activists
a
tumultuous
reception
upon
their
return
to
black
townships
across
the
country
.

Most
of
those
freed
had
spent
at
least
25
years
in
prison
.

The
77-year-old
Sisulu
,
sentenced
to
life
in
1964
along
with
black
nationalist
Nelson
Mandela
for
plotting
to
overthrow
the
government
,
said
equality
for
blacks
in
South
Africa
was
in
reach
.

The
releases
,
announced
last
week
by
President
de
Klerk
,
were
viewed
as
Pretoria
's
tacit
legalization
of
the
ANC
.

Mandela
,
considered
the
most
prominent
leader
of
the
ANC
,
remains
in
prison
.

But
his
release
within
the
next
few
months
is
widely
expected
.

The
Soviet
Union
reported
that
thousands
of
tons
of
goods
needed
to
ease
widespread
shortages
across
the
nation
were
piled
up
at
ports
and
rail
depots
,
and
food
shipments
were
rotting
because
of
a
lack
of
people
and
equipment
to
move
the
cargo
.

Strikes
and
mismanagement
were
cited
,
and
Premier
Ryzhkov
warned
of
``
tough
measures
.
''

Bush
indicated
there
might
be
``
room
for
flexibility
''
in
a
bill
to
allow
federal
funding
of
abortions
for
poor
women
who
are
vicitims
of
rape
and
incest
.

He
reiterated
his
opposition
to
such
funding
,
but
expressed
hope
of
a
compromise
.

The
president
,
at
a
news
conference
Friday
,
also
renewed
a
call
for
the
ouster
of
Panama
's
Noriega
.

The
White
House
said
minors
have
n't
any
right
to
abortion
without
the
consent
of
their
parents
.

The
administration
's
policy
was
stated
in
a
friend-of-the-court
brief
urging
the
Supreme
Court
to
give
states
more
leeway
to
restrict
abortions
.

Ten
of
the
nation
's
governors
,
meanwhile
,
called
on
the
justices
to
reject
efforts
to
limit
abortions
.

The
Justice
Department
announced
that
the
FBI
has
been
given
the
authority
to
seize
U.S.
fugitives
overseas
without
the
permission
of
foreign
governments
.

Secretary
of
State
Baker
emphasized
Friday
that
the
new
policy
would
n't
be
invoked
by
the
Bush
administration
without
full
consideration
of
foreign-policy
implications
.

NASA
pronounced
the
space
shuttle
Atlantis
ready
for
launch
tomorrow
following
a
five-day
postponement
of
the
flight
because
of
a
faulty
engine
computer
.

The
device
was
replaced
.

The
spacecraft
's
five
astronauts
are
to
dispatch
the
Galileo
space
probe
on
an
exploration
mission
to
Jupiter
.

South
Korea
's
President
Roh
traveled
to
the
U.S.
for
a
five-day
visit
that
is
expected
to
focus
on
ties
between
Washington
and
Seoul
.

Roh
,
who
is
facing
calls
for
the
reduction
of
U.S.
military
forces
in
South
Korea
,
is
to
meet
with
Bush
tomorrow
and
is
to
address
a
joint
session
of
Congress
on
Wednesday
.

China
's
Communist
leadership
voted
to
purge
the
party
of
``
hostile
and
anti-party
elements
''
and
wealthy
private
businessmen
,
whom
they
called
exploiters
.

The
decision
,
reported
by
the
official
Xinhua
News
Agency
,
indicated
that
the
crackdown
prompted
by
student-led
pro-democracy
protests
in
June
is
intensifying
.

Hundreds
of
East
Germans
flocked
to
Bonn
's
Embassy
in
Warsaw
,
bringing
to
more
than
1,200
the
number
of
emigres
expected
to
flee
to
the
West
beginning
today
.

More
than
2,100
others
escaped
to
West
Germany
through
Hungary
over
the
Weekend
.

In
Leipzig
,
activists
vowed
to
continue
street
protests
to
demand
internal
change
.

Zaire
's
President
Mobutu
met
in
southern
France
with
Angolan
rebel
leader
Savimbi
and
a
senior
U.S.
envoy
in
a
bid
to
revive
an
accord
to
end
Angola
's
civil
war
.

Details
of
the
talks
,
described
by
a
Zairean
official
as
``
very
delicate
,
''
were
n't
disclosed
.

PLO
leader
Arafat
insisted
on
guarantees
that
any
elections
in
the
Israeli-occupied
territories
would
be
impartial
.

He
made
his
remarks
to
a
PLO
gathering
in
Baghdad
.

In
the
occupied
lands
,
underground
leaders
of
the
Arab
uprising
rejected
a
U.S.
plan
to
arrange
Israeli-Palestinian
talks
as
Shamir
opposed
holding
such
discussions
in
Cairo
.

Lebanese
Christian
lawmakers
presented
to
Arab
mediators
at
talks
in
Saudi
Arabia
proposals
for
a
new
timetable
for
the
withdrawal
of
Syria
's
forces
from
Lebanon
.

A
plan
currently
under
study
gives
Damascus
two
years
to
pull
back
to
eastern
Lebanon
,
starting
from
the
time
Beirut
's
legislature
increases
political
power
for
Moslems
.

Hurricane
Jerry
threatened
to
combine
with
the
highest
tides
of
the
year
to
swamp
the
Texas-Louisiana
coast
.

Thousands
of
residents
of
low-lying
areas
were
ordered
to
evacuate
as
the
storm
headed
north
in
the
Gulf
of
Mexico
with
80
mph
winds
.

A
group
of
Arby
's
franchisees
said
they
formed
an
association
to
oppose
Miami
Beach
financier
Victor
Posner
's
control
of
the
restaurant
chain
.

The
decision
is
the
latest
move
in
an
escalating
battle
between
the
franchisees
and
Mr.
Posner
that
began
in
August
.

At
the
time
,
a
group
called
R.B.
Partners
Ltd.
,
consisting
of
eight
of
Arby
's
largest
franchisees
,
offered
more
than
$
200
million
to
buy
Arby
's
Inc.
,
which
is
part
of
DWG
Corp
.

DWG
is
a
holding
company
controlled
by
Mr.
Posner
.

One
week
later
,
Leonard
H.
Roberts
,
president
and
chief
executive
officer
of
Arby
's
,
was
fired
in
a
dispute
with
Mr.
Posner
.

Friday
,
42
franchisees
announced
the
formation
of
an
association
--
called
A.P.
Association
Inc.
--
to
``
preserve
the
integrity
of
the
Arby
's
system
.
''

The
franchisees
,
owners
or
operators
of
1,000
of
the
1,900
franchised
Arby
's
in
the
U.S.
,
said
:
``
We
have
concluded
that
continued
control
of
Arby
's
by
Victor
Posner
is
totally
unacceptable
to
us
,
because
it
is
extremely
likely
to
cause
irreparable
damage
to
the
Arby
's
system
.

We
support
all
efforts
to
remove
Victor
Posner
from
control
of
Arby
's
Inc.
and
the
Arby
's
system
.
''

The
group
said
it
would
consider
,
among
other
things
,
withholding
royalty
payments
and
initiating
a
class-action
lawsuit
seeking
court
approval
for
the
withholdings
.

In
Florida
,
Renee
Mottram
,
a
senior
vice
president
at
DWG
,
responded
:
``
We
do
n't
think
any
individual
or
group
should
disrupt
a
winning
system
or
illegally
interfere
with
existing
contractual
relationships
for
their
own
self-serving
motives
.

September
's
steep
rise
in
producer
prices
shows
that
inflation
still
persists
,
and
the
pessimism
over
interest
rates
caused
by
the
new
price
data
contributed
to
the
stock
market
's
plunge
Friday
.

After
falling
for
three
consecutive
months
,
the
producer
price
index
for
finished
goods
shot
up
0.9
%
last
month
,
the
Labor
Department
reported
Friday
,
as
energy
prices
jumped
after
tumbling
through
the
summer
.

Although
the
report
,
which
was
released
before
the
stock
market
opened
,
did
n't
trigger
the
190.58-point
drop
in
the
Dow
Jones
Industrial
Average
,
analysts
said
it
did
play
a
role
in
the
market
's
decline
.

Analysts
immediately
viewed
the
price
data
,
the
grimmest
inflation
news
in
months
,
as
evidence
that
the
Federal
Reserve
was
unlikely
to
allow
interest
rates
to
fall
as
many
investors
had
hoped
.

Further
fueling
the
belief
that
pressures
in
the
economy
were
sufficient
to
keep
the
Fed
from
easing
credit
,
the
Commerce
Department
reported
Friday
that
retail
sales
grew
0.5
%
in
September
,
to
$
145.21
billion
.

That
rise
came
on
top
of
a
0.7
%
gain
in
August
,
and
suggested
there
is
still
healthy
consumer
demand
in
the
economy
.

``
I
think
the
Friday
report
,
combined
with
the
actions
of
the
Fed
,
weakened
the
belief
that
there
was
going
to
be
an
imminent
easing
of
monetary
policy
,
''
said
Robert
Dederick
,
chief
economist
at
Northern
Trust
Co.
in
Chicago
.

But
economists
were
divided
over
the
extent
of
the
inflation
threat
signaled
by
the
new
numbers
.

``
The
overall
0.9
%
increase
is
serious
in
itself
,
but
what
is
even
worse
is
that
excluding
food
and
energy
,
the
producer
price
index
still
increased
by
0.7
%
,
''
said
Gordon
Richards
,
an
economist
at
the
National
Association
of
Manufacturers
.

But
Sung
Won
Sohn
,
chief
economist
at
Norwest
Corp.
in
Minneapolis
,
blamed
rising
energy
prices
and
the
annual
autumn
increase
in
car
prices
for
most
of
the
September
jump
.

``
I
would
say
this
is
not
bad
news
;
this
is
a
blip
,
''
he
said
.

``
The
core
rate
is
not
really
out
of
line
.
''

All
year
,
energy
prices
have
skewed
the
producer
price
index
,
which
measures
changes
in
the
prices
producers
receive
for
goods
.

Inflation
unquestionably
has
fallen
back
from
its
torrid
pace
last
winter
,
when
a
steep
run-up
in
world
oil
prices
sent
the
index
surging
at
double-digit
annual
rates
.

Energy
prices
then
plummeted
through
the
summer
,
causing
the
index
to
decline
for
three
consecutive
months
.

Overall
,
the
index
has
climbed
at
a
5.1
%
compound
annual
rate
since
the
start
of
the
year
,
the
Labor
Department
said
.

While
far
more
restrained
than
the
pace
at
the
beginning
of
the
year
,
that
is
still
a
steeper
rise
than
the
4.0
%
increase
for
all
of
1988
.

Moreover
,
this
year
's
good
inflation
news
may
have
ended
last
month
,
when
energy
prices
zoomed
up
6.5
%
after
plunging
7.3
%
in
August
.

Some
analysts
expect
oil
prices
to
remain
relatively
stable
in
the
months
ahead
,
leaving
the
future
pace
of
inflation
uncertain
.

Analysts
had
expected
that
the
climb
in
oil
prices
last
month
would
lead
to
a
substantial
rise
in
the
producer
price
index
,
but
the
0.9
%
climb
was
higher
than
most
anticipated
.

``
I
think
the
resurgence
{
in
inflation
}
is
going
to
continue
for
a
few
months
,
''
said
John
Mueller
,
chief
economist
at
Bell
Mueller
Cannon
,
a
Washington
economic
forecasting
firm
.

He
predicted
that
inflation
will
moderate
next
year
,
saying
that
credit
conditions
are
fairly
tight
world-wide
.

But
Dirk
Van
Dongen
,
president
of
the
National
Association
of
Wholesaler-Distributors
,
said
that
last
month
's
rise
``
is
n't
as
bad
an
omen
''
as
the
0.9
%
figure
suggests
.

``
If
you
examine
the
data
carefully
,
the
increase
is
concentrated
in
energy
and
motor
vehicle
prices
,
rather
than
being
a
broad-based
advance
in
the
prices
of
consumer
and
industrial
goods
,
''
he
explained
.

Passenger
car
prices
jumped
3.8
%
in
September
,
after
climbing
0.5
%
in
August
and
declining
in
the
late
spring
and
summer
.

Many
analysts
said
the
September
increase
was
a
one-time
event
,
coming
as
dealers
introduced
their
1990
models
.

Although
all
the
price
data
were
adjusted
for
normal
seasonal
fluctuations
,
car
prices
rose
beyond
the
customary
autumn
increase
.

Prices
for
capital
equipment
rose
a
hefty
1.1
%
in
September
,
while
prices
for
home
electronic
equipment
fell
1.1
%
.

Food
prices
declined
0.6
%
,
after
climbing
0.3
%
in
August
.

Meanwhile
,
the
retail
sales
report
showed
that
car
sales
rose
0.8
%
in
September
to
$
32.82
billion
.

But
at
least
part
of
the
increase
could
have
come
from
higher
prices
,
analysts
said
.

Sales
at
general
merchandise
stores
rose
1.7
%
after
declining
0.6
%
in
August
,
while
sales
of
building
materials
fell
1.8
%
after
rising
1.7
%
.

Producer
prices
for
intermediate
goods
grew
0.4
%
in
September
,
after
dropping
for
three
consecutive
months
.

Prices
for
crude
goods
,
an
array
of
raw
materials
,
jumped
1.1
%
after
declining
1.9
%
in
August
and
edging
up
0.2
%
in
July
.

Here
are
the
Labor
Department
's
producer
price
indexes
(
1982
=
100
)
for
September
,
before
seasonal
adjustment
,
and
the
percentage
changes
from
September
,
1988
.

CityFed
Financial
Corp.
said
it
expects
to
report
a
loss
of
at
least
$
125
million
to
$
150
million
for
the
third
quarter
.

In
the
year-earlier
period
,
CityFed
had
net
income
of
$
485,000
,
but
no
per-share
earnings
.

CityFed
's
president
and
chief
executive
officer
,
John
Atherton
,
said
the
loss
stems
from
several
factors
.

He
said
nonperforming
assets
rose
to
slightly
more
than
$
700
million
from
$
516
million
between
June
and
September
.

Approximately
85
%
of
the
total
consisted
of
nonperforming
commercial
real
estate
assets
.

Accordingly
,
CityFed
estimated
that
it
will
provide
between
$
85
million
and
$
110
million
for
credit
losses
in
the
third
quarter
.

CityFed
added
that
significant
additional
loan-loss
provisions
may
be
required
by
federal
regulators
as
part
of
the
current
annual
examination
of
City
Federal
Savings
Bank
,
CityFed
's
primary
subsidiary
,
based
in
Somerset
,
N.J
.

City
Federal
operates
105
banking
offices
in
New
Jersey
and
Florida
.

Mr.
Atherton
said
CityFed
will
also
mark
its
portfolio
of
high-yield
corporate
bonds
to
market
as
a
result
of
federal
legislation
requiring
that
savings
institutions
divest
themselves
of
such
bonds
.

That
action
,
CityFed
said
,
will
result
in
a
charge
against
third-quarter
results
of
approximately
$
30
million
.

CityFed
also
said
it
expects
to
shed
its
remaining
mortgage
loan
origination
operations
outside
its
principal
markets
in
New
Jersey
and
Florida
and
,
as
a
result
,
is
taking
a
charge
for
discontinued
operations
.

All
these
actions
,
Mr.
Atherton
said
,
will
result
in
a
loss
of
$
125
million
to
$
150
million
for
the
third
quarter
.

He
added
,
however
:
``
Depending
on
the
resolution
of
certain
accounting
issues
relating
to
mortgages
servicing
and
the
outcome
of
the
annual
examination
of
City
Federal
currently
in
progress
with
respect
to
the
appropriate
level
of
loan
loss
reserves
,
the
total
loss
for
the
quarter
could
significantly
exceed
this
range
.

CenTrust
Savings
Bank
said
federal
thrift
regulators
ordered
it
to
suspend
dividend
payments
on
its
two
classes
of
preferred
stock
,
indicating
that
regulators
'
concerns
about
the
troubled
institution
have
heightened
.

In
a
statement
,
Miami-based
CenTrust
said
the
regulators
cited
the
thrift
's
operating
losses
and
``
apparent
losses
''
in
its
junk-bond
portfolio
in
ordering
the
suspension
of
the
dividends
.

Regulators
also
ordered
CenTrust
to
stop
buying
back
the
preferred
stock
.

David
L.
Paul
,
chairman
and
chief
executive
officer
,
criticized
the
federal
Office
of
Thrift
Supervision
,
which
issued
the
directive
,
saying
it
was
``
inappropriate
''
and
based
on
``
insufficient
''
reasons
.

He
said
the
thrift
will
try
to
get
regulators
to
reverse
the
decision
.

The
suspension
of
a
preferred
stock
dividend
is
a
serious
step
that
signals
that
regulators
have
deep
concerns
about
an
institution
's
health
.

In
March
,
regulators
labeled
CenTrust
a
``
troubled
institution
,
''
largely
because
of
its
big
junk-bond
holdings
and
its
operating
losses
.

In
the
same
month
,
the
Office
of
Thrift
Supervision
ordered
the
institution
to
stop
paying
common
stock
dividends
until
its
operations
were
on
track
.

For
the
nine
months
ended
June
30
,
CenTrust
had
a
net
loss
of
$
21.3
million
,
compared
with
year-earlier
net
income
of
$
52.8
million
.

CenTrust
,
which
is
Florida
's
largest
thrift
,
holds
one
of
the
largest
junk-bond
portfolios
of
any
thrift
in
the
nation
.

Since
April
,
it
has
pared
its
high-yield
bond
holdings
to
about
$
890
million
from
$
1.35
billion
.

Mr.
Paul
said
only
about
$
150
million
of
the
current
holdings
are
tradeable
securities
registered
with
the
Securities
and
Exchange
Commission
.

The
remainder
,
he
said
,
are
commercial
loan
participations
,
or
private
placements
,
that
are
n't
filed
with
the
SEC
and
do
n't
have
a
ready
market
.

CenTrust
and
regulators
have
been
in
a
dispute
over
market
valuations
for
the
junk
bonds
.

The
Office
of
Thrift
Supervision
has
been
hounding
CenTrust
to
provide
current
market
values
for
its
holdings
,
but
CenTrust
has
said
it
ca
n't
easily
obtain
such
values
because
of
the
relative
illiquidity
of
the
bonds
and
lack
of
a
ready
market
.

Regulators
have
become
increasingly
antsy
about
CenTrust
's
and
other
thrifts
'
junk-bond
holdings
in
light
of
the
recent
federal
thrift
bailout
legislation
and
the
recent
deep
decline
in
the
junk-bond
market
.

The
legislation
requires
thrifts
to
divest
themselves
of
junk
bonds
in
the
new
,
somber
regulatory
climate
.

In
American
Stock
Exchange
composite
trading
Friday
,
CenTrust
common
shares
closed
at
$
3
,
down
12.5
cents
.

In
a
statement
Friday
,
Mr.
Paul
challenged
the
regulators
'
decision
,
saying
the
thrift
's
operating
losses
and
``
apparent
''
junk-bond
losses
``
have
been
substantially
offset
by
gains
in
other
activities
of
the
bank
.
''

He
also
said
substantial
reserves
have
been
set
aside
for
possible
losses
from
the
junk
bonds
.

In
the
third
quarter
,
for
instance
,
CenTrust
added
$
22.5
million
to
its
general
reserves
.

Mr.
Paul
said
the
regulators
should
instead
move
ahead
with
approving
CenTrust
's
request
to
sell
63
of
its
71
branches
to
Great
Western
Bank
,
a
unit
of
Great
Western
Financial
Corp.
based
in
Beverly
Hills
,
Calif
.

The
branch
sale
is
the
centerpiece
of
CenTrust
's
strategy
to
transform
itself
into
a
traditional
S&L
from
a
high-flying
institution
that
relied
heavily
on
securities
trading
for
profits
,
according
to
Mr.
Paul
.

Most
analysts
and
thrift
executives
had
expected
a
decision
on
the
proposed
transaction
,
which
was
announced
in
July
,
long
before
now
.

Many
interpret
the
delay
as
an
indication
that
regulators
are
skeptical
about
the
proposal
.

Branches
and
deposits
can
be
sold
at
a
premium
in
the
event
federal
regulators
take
over
an
institution
.

CenTrust
,
however
,
touts
the
branch
sale
,
saying
it
would
bring
in
$
150
million
and
reduce
the
thrift
's
assets
to
$
6.7
billion
from
$
9
billion
.

It
said
the
sale
would
give
it
positive
tangible
capital
of
$
82
million
,
or
about
1.2
%
of
assets
,
from
a
negative
$
33
million
as
of
Sept.
30
,
thus
bringing
CenTrust
close
to
regulatory
standards
.

CenTrust
said
the
branch
sale
would
also
reduce
the
company
's
large
amount
of
good
will
by
about
$
180
million
.

Critics
,
however
,
say
the
branch
sale
will
make
CenTrust
more
dependent
than
ever
on
brokered
deposits
and
junk
bonds
.

Mr.
Paul
counters
that
he
intends
to
further
pare
the
size
of
CenTrust
by
not
renewing
more
than
$
1
billion
of
brokered
certificates
of
deposit
when
they
come
due
.

The
thrift
is
also
working
to
unload
its
junk-bond
portfolio
by
continuing
to
sell
off
the
bonds
,
and
it
plans
to
eventually
place
some
of
them
in
a
separate
affiliate
,
as
required
under
the
new
thrift
law
.

On
a
recent
Saturday
night
,
in
the
midst
of
West
Germany
's
most
popular
prime-time
show
,
a
contestant
bet
the
host
that
she
could
name
any
of
100
different
cheeses
after
just
one
nibble
,
while
blindfolded
.

The
woman
won
the
bet
.

But
perhaps
even
more
remarkable
,
the
three-hour-show
,
``
Wetten
Dass
''
(
Make
a
Bet
)
,
regularly
wins
the
top
slot
in
the
country
's
TV
ratings
,
sometimes
drawing
as
many
as
50
%
of
West
German
households
.

As
the
1992
economic
integration
approaches
,
Europe
's
cultural
curators
have
taken
to
the
ramparts
against
American
``
cultural
imperialism
,
''
threatening
to
impose
quotas
against
such
pop
invaders
as
``
Dallas
,
''
``
Miami
Vice
''
and
``
L.A.
Law
.
''

But
much
of
what
the
Europeans
want
to
protect
seems
every
bit
as
cheesy
as
what
they
are
trying
to
keep
out
.

The
most
militant
opposition
to
American
TV
imports
has
come
from
French
television
and
movie
producers
,
who
have
demanded
quotas
ensuring
that
a
full
60
%
of
Europe
's
TV
shows
be
produced
in
Europe
.

So
far
,
the
French
have
failed
to
win
enough
broad-based
support
to
prevail
.

A
glance
through
the
television
listings
and
a
few
twists
of
the
European
television
dial
suggest
one
reason
why
.

While
there
are
some
popular
action
and
drama
series
,
few
boast
the
high
culture
and
classy
production
values
one
might
expect
.

More
European
air
time
is
filled
with
low-budget
game
shows
,
variety
hours
,
movies
and
talk
shows
,
many
of
which
are
authorized
knock-offs
of
their
American
counterparts
.

One
of
France
's
most
popular
Saturday
night
programs
features
semi-celebrities
seeking
out
their
grammar-school
classmates
for
on-air
reunions
.

A
Flemish
game
show
has
as
its
host
a
Belgian
pretending
to
be
Italian
.

One
of
Italy
's
favorite
shows
,
``
Fantastico
,
''
a
tepid
variety
show
,
is
so
popular
that
viewers
clamored
to
buy
a
chocolate
product
,
``
Cacao
Fantastico
,
''
whose
praises
were
sung
each
week
by
dancing
showgirls
--
even
though
the
product
did
n't
exist
.

Topping
the
cheese
stunt
,
on
another
typical
evening
of
fun
on
``
Wetten
Dass
,
''
a
contestant
won
a
bet
with
the
show
's
host
,
Thomas
Gottschalk
,
that
he
could
identify
300
German
dialects
over
the
telephone
.

A
celebrity
guest
,
U.S.
Ambassador
to
West
Germany
Richard
Burt
,
also
won
a
bet
that
someone
could
pile
up
$
150
worth
of
quarters
on
a
slanted
coin
.

Mr.
Burt
nonetheless
paid
the
penalty
as
if
he
had
lost
,
agreeing
to
spend
a
day
with
West
German
Foreign
Minister
Hans-Dietrich
Genscher
frying
and
selling
their
combined
weight
in
potato
pancakes
.

If
this
seems
like
pretty
weak
stuff
around
which
to
raise
the
protectionist
barriers
,
it
may
be
because
these
shows
need
all
the
protection
they
can
get
.

European
programs
usually
target
only
their
own
local
audience
,
and
often
only
a
small
portion
of
that
.

Mega-hits
in
Germany
or
Italy
rarely
make
it
even
to
France
or
Great
Britain
,
and
almost
never
show
up
on
U.S.
screens
.

Attempts
to
produce
``
pan-European
''
programs
have
generally
resulted
in
disappointment
.

One
annual
co-production
,
the
three-hour-long
``
Eurovision
Song
Contest
,
''
featuring
soft-rock
songs
from
each
of
20
European
countries
,
has
been
described
as
the
world
's
most
boring
TV
show
.

Another
,
``
Jeux
Sans
Frontieres
,
''
where
villagers
from
assorted
European
countries
make
fools
of
themselves
performing
pointless
tasks
,
is
a
hit
in
France
.

A
U.S.-made
imitation
under
the
title
``
Almost
Anything
Goes
''
flopped
fast
.

For
the
most
part
,
what
's
made
here
stays
here
,
and
for
good
reason
.

The
cream
of
the
British
crop
,
the
literary
dramas
that
are
shown
on
U.S.
public
television
as
``
Masterpiece
Theater
,
''
make
up
a
relatively
small
part
of
British
air
time
.

Most
British
programming
is
more
of
an
acquired
taste
.

There
is
,
for
instance
,
``
One
Man
and
His
Dog
,
''
a
herding
contest
among
sheep
dogs
.

Also
riveting
to
the
British
are
hours
of
dart-throwing
championships
,
even
more
hours
of
lawn
bowling
contests
and
still
more
hours
of
snooker
marathons
.

European
drama
has
had
better
,
though
still
mixed
,
fortunes
.

The
most
popular
such
shows
focus
on
narrow
national
concerns
.

A
French
knock-off
of
``
Dallas
,
''
called
``
Chateauvallon
''
and
set
in
a
French
vineyard
,
had
a
good
run
in
France
,
which
ended
after
the
female
lead
was
injured
in
a
real-life
auto
accident
.

``
Schwarzwaldklinik
,
''
(
Black
Forest
Clinic
)
,
a
kind
of
German
``
St
.
Elsewhere
''
set
in
a
health
spa
,
is
popular
in
Germany
,
and
has
spread
into
France
.

Italy
's
most
popular
series
is
a
drama
called
``
La
Piovra
,
''
or
``
The
Octopus
,
''
which
chronicles
the
fight
of
an
idealistic
young
investigator
in
Palermo
against
the
Mafia
.

It
was
front-page
news
in
Italy
earlier
this
year
when
the
fictional
inspector
was
gunned
down
in
the
series
.

Spain
's
most
popular
mini-series
this
year
was
``
Juncal
,
''
the
story
of
an
aging
bullfighter
.

``
The
trend
is
pretty
well
established
now
that
local
programs
are
the
most
popular
,
with
American
programs
second
,
''
says
Brian
Wenham
,
a
former
director
of
programs
for
the
British
Broadcasting
Corp
.

``
Given
a
choice
,
everybody
will
watch
a
home-produced
show
.
''

But
frequently
there
is
n't
much
choice
.

Thus
,
Europe
has
begun
the
recent
crusade
to
produce
more
worthy
shows
of
its
own
,
programs
with
broader
appeal
.

``
We
've
basically
got
to
start
from
scratch
,
to
train
writers
and
producers
to
make
shows
that
other
people
will
want
to
see
,
''
concedes
Colin
Young
,
head
of
Britain
's
National
Film
Theatre
School
.

While
some
in
the
U.S.
contend
that
advertising
is
the
bane
of
television
,
here
many
believe
that
its
absence
is
to
blame
for
the
European
TV
industry
's
sluggish
development
.

Until
recently
,
national
governments
in
Europe
controlled
most
of
the
air
time
and
allowed
little
or
no
advertising
.

Since
production
costs
were
guaranteed
,
it
did
n't
matter
that
a
program
could
n't
be
sold
abroad
or
put
into
syndication
,
as
most
American
programs
are
.

But
not
much
money
was
spent
on
the
shows
,
either
,
a
situation
that
encouraged
cheap-to-make
talk
and
game
shows
,
while
discouraging
expensive-to-produce
dramas
.

Now
,
however
,
commercial
channels
are
coming
to
most
European
countries
,
and
at
the
same
time
,
satellite
and
cable
technology
is
spreading
rapidly
.

Just
last
week
,
Greece
authorized
two
commercial
channels
for
the
first
time
;
Spain
earlier
began
to
allow
commercial
television
alongside
its
state
channels
.

The
result
is
a
new
and
huge
appetite
for
programming
.

But
perhaps
to
the
consternation
of
those
calling
for
quotas
,
most
of
this
void
is
likely
to
be
filled
with
the
cheapest
and
most
plentiful
programming
now
available
--
reruns
--
usually
of
shows
made
in
the
U.S.
.

Sky
Channel
,
a
British-based
venture
of
Australian-American
press
tycoon
Rupert
Murdoch
,
offers
what
must
be
a
baffling
cultural
mix
to
most
of
its
audience
.

The
financially
struggling
station
offers
programs
obviously
made
available
cheaply
from
its
boss
's
other
ventures
.

In
a
Madrid
hotel
room
recently
,
a
viewer
caught
the
end
of
a
badly
acted
series
about
a
fishing
boat
on
Australia
's
Great
Barrier
Reef
,
only
to
be
urged
by
the
British
announcer
to
``
stay
tuned
for
the
further
adventures
of
Skippy
the
Kangaroo
.
''

Lisa
Grishaw-Mueller
in
Bonn
,
Laura
Colby
in
Milan
,
Tim
Carrington
in
London
and
Carlta
Vitzhum
in
Madrid
contributed
to
this
article
.

British
Aerospace
PLC
and
France
's
Thomson-CSF
S.A.
said
they
are
nearing
an
agreement
to
merge
their
guided-missile
divisions
,
greatly
expanding
collaboration
between
the
two
defense
contractors
.

The
50-50
joint
venture
,
which
may
be
dubbed
Eurodynamics
,
would
have
combined
annual
sales
of
at
least
#
1.4
billion
(
$
2.17
billion
)
and
would
be
among
the
world
's
largest
missile
makers
.

After
two
years
of
talks
,
plans
for
the
venture
are
sufficiently
advanced
for
the
companies
to
seek
French
and
British
government
clearance
.

The
companies
hope
for
a
final
agreement
by
year-end
.

The
venture
would
strengthen
the
rapidly
growing
ties
between
the
two
companies
,
and
help
make
them
a
leading
force
in
European
defense
contracting
.

In
recent
months
,
a
string
of
cross-border
mergers
and
joint
ventures
have
reshaped
the
once-balkanized
world
of
European
arms
manufacture
.

Already
,
British
Aerospace
and
French
government-controlled
Thomson-CSF
collaborate
on
a
British
missile
contract
and
on
an
air-traffic
control
radar
system
.

Just
last
week
they
announced
they
may
make
a
joint
bid
to
buy
Ferranti
International
Signal
PLC
,
a
smaller
British
defense
contractor
rocked
by
alleged
accounting
fraud
at
a
U.S.
unit
.

The
sudden
romance
of
British
Aerospace
and
Thomson-CSF
--
traditionally
bitter
competitors
for
Middle
East
and
Third
World
weapons
contracts
--
is
stirring
controversy
in
Western
Europe
's
defense
industry
.

Most
threatened
by
closer
British
Aerospace-Thomson
ties
would
be
their
respective
national
rivals
,
including
Matra
S.A.
in
France
and
Britain
's
General
Electric
Co.
PLC
.

But
neither
Matra
nor
GEC
--
unrelated
to
Stamford
,
Conn.-based
General
Electric
Co.
--
are
sitting
quietly
by
as
their
competitors
join
forces
.

Yesterday
,
a
source
close
to
GEC
confirmed
that
his
company
may
join
the
Ferranti
fight
,
as
part
of
a
possible
consortium
that
would
bid
against
British
Aerospace
and
Thomson-CSF
.

Companies
with
which
GEC
has
had
talks
about
a
possible
joint
Ferranti
bid
include
Matra
,
Britain
's
Dowty
Group
PLC
,
West
Germany
's
Daimler-Benz
AG
,
and
France
's
Dassault
group
.

But
it
may
be
weeks
before
GEC
and
its
potential
partners
decide
whether
to
bid
,
the
source
indicated
.

GEC
plans
first
to
study
Ferranti
's
financial
accounts
,
which
auditors
recently
said
included
#
215
million
in
fictitious
contracts
at
a
U.S.
unit
,
International
Signal
&
Control
Group
,
with
which
Ferranti
merged
last
year
.

Also
,
any
GEC
bid
might
be
blocked
by
British
antitrust
regulators
;
Ferranti
is
GEC
's
main
competitor
on
several
key
defense-electronics
contracts
,
and
its
purchase
by
GEC
may
heighten
British
Defense
Ministry
worries
about
concentration
in
the
country
's
defense
industry
.

A
consortium
bid
,
however
,
would
diminish
GEC
's
direct
role
in
Ferranti
and
might
consequently
appease
ministry
officials
.

A
British
Aerospace
spokeswoman
appeared
unperturbed
by
the
prospect
of
a
fight
with
GEC
for
Ferranti
:
``
Competition
is
the
name
of
the
game
,
''
she
said
.

At
least
one
potential
GEC
partner
,
Matra
,
insists
it
is
n't
interested
in
Ferranti
.

``
We
have
nothing
to
say
about
this
affair
,
which
does
n't
concern
us
,
''
a
Matra
official
said
Sunday
.

The
missile
venture
,
the
British
Aerospace
spokeswoman
said
,
is
a
needed
response
to
the
``
new
environment
''
in
defense
contracting
.

For
both
Thomson
and
British
Aerospace
,
earnings
in
their
home
markets
have
come
under
pressure
from
increasingly
tight-fisted
defense
ministries
;
and
Middle
East
sales
,
a
traditional
mainstay
for
both
companies
'
exports
,
have
been
hurt
by
five
years
of
weak
oil
prices
.

The
venture
's
importance
for
Thomson
is
great
.

Thomson
feels
the
future
of
its
defense
business
depends
on
building
cooperation
with
other
Europeans
.

The
European
defense
industry
is
consolidating
;
for
instance
,
West
Germany
's
Siemens
AG
recently
joined
GEC
in
a
takeover
of
Britain
's
Plessey
Co.
,
and
Daimler-Benz
agreed
to
buy
Messerschmitt-Boelkow
Blohm
G.m.b
.
H
.

In
missiles
,
Thomson
is
already
overshadowed
by
British
Aerospace
and
by
its
home
rival
,
France
's
Aerospatiale
S.A.
;
to
better
compete
,
Thomson
officials
say
,
they
need
a
partnership
.

To
justify
50-50
ownership
of
the
planned
venture
,
Thomson
would
make
a
cash
payment
to
British
Aerospace
.

Annual
revenue
of
British
Aerospace
's
missile
business
is
about
#
950
million
,
a
Thomson
spokesman
said
.

British
Aerospace
's
chief
missile
products
include
its
17-year-old
family
of
Rapier
surface-to-air
missiles
.

Thomson
missile
products
,
with
about
half
British
Aerospace
's
annual
revenue
,
include
the
Crotale
surface-to-air
missile
family
.

Interprovincial
Pipe
Line
Co.
said
it
will
delay
a
proposed
two-step
,
830
million
Canadian-dollar
(
US$
705.6
million
)
expansion
of
its
system
because
Canada
's
output
of
crude
oil
is
shrinking
.

Interprovincial
,
Canada
's
biggest
oil
pipeline
operator
and
a
major
transporter
of
crude
to
the
U.S.
,
said
revised
industry
forecasts
indicate
that
Canadian
oil
output
will
total
about
1.64
million
barrels
a
day
by
1991
,
8
%
lower
than
a
previous
estimate
.

Canadian
crude
production
averaged
about
1.69
million
barrels
a
day
during
1989
's
first
half
,
about
1
%
below
the
1988
level
.

``
The
capability
of
existing
fields
to
deliver
oil
is
dropping
,
''
and
oil
exploration
activity
is
also
down
dramatically
,
as
many
producers
shift
their
emphasis
to
natural
gas
,
said
Ronald
Watkins
,
vice
president
for
government
and
industry
relations
with
Interprovincial
's
parent
,
Interhome
Energy
Inc
.

Mr.
Watkins
said
volume
on
Interprovincial
's
system
is
down
about
2
%
since
January
and
is
expected
to
fall
further
,
making
expansion
unnecessary
until
perhaps
the
mid-1990s
.

``
There
has
been
a
swing
of
the
pendulum
back
to
the
gas
side
,
''
he
said
.

Many
of
Canada
's
oil
and
gas
producers
say
the
outlook
for
natural
gas
is
better
than
it
is
for
oil
,
and
have
shifted
their
exploration
and
development
budgets
accordingly
.

The
number
of
active
drilling
rigs
in
Canada
is
down
30
%
from
a
year
ago
,
and
the
number
of
completed
oil
wells
is
``
down
more
than
that
,
due
to
the
increasing
focus
on
gas
exploration
,
''
said
Robert
Feick
,
manager
of
crude
oil
with
Calgary
's
Independent
Petroleum
Association
of
Canada
,
an
industry
group
.

Mr.
Watkins
said
the
main
reason
for
the
production
decline
is
shrinking
output
of
light
crude
from
mature
,
conventional
fields
in
western
Canada
.

Interprovincial
transports
about
75
%
of
all
crude
produced
in
western
Canada
,
and
almost
60
%
of
Interprovincial
's
total
volume
consists
of
light
crude
.

Nearly
all
of
the
crude
oil
that
Canada
exports
to
the
U.S.
is
transported
on
Interprovincial
's
system
,
whose
main
line
runs
from
Edmonton
to
major
U.S.
and
Canadian
cities
in
the
Great
Lakes
region
,
including
Chicago
,
Buffalo
,
Toronto
and
Montreal
.

Canada
's
current
oil
exports
to
the
U.S.
total
about
600,000
barrels
a
day
,
or
about
9.1
%
of
net
U.S.
crude
imports
,
said
John
Lichtblau
,
president
of
the
New
York-based
Petroleum
Industry
Research
Foundation
.

That
ranks
Canada
as
the
fourth-largest
source
of
imported
crude
,
behind
Saudi
Arabia
,
Nigeria
and
Mexico
.

Mr.
Lichtblau
said
Canada
's
declining
crude
output
,
combined
with
the
fast-shrinking
output
of
U.S.
crude
,
will
help
intensify
U.S.
reliance
on
oil
from
overseas
,
particularly
the
Middle
East
.

``
It
's
very
much
a
growing
concern
.

But
when
something
is
inevitable
,
you
learn
to
live
with
it
,
''
he
said
.

Mr.
Lichtblau
stressed
that
the
delay
of
Interprovincial
's
proposed
expansion
wo
n't
by
itself
increase
U.S.
dependence
on
offshore
crude
,
however
,
since
Canadian
imports
are
limited
in
any
case
by
Canada
's
falling
output
.

Under
terms
of
its
proposed
two-step
expansion
,
which
would
have
required
regulatory
approval
,
Interprovincial
intended
to
add
200,000
barrels
a
day
of
additional
capacity
to
its
system
,
beginning
with
a
modest
expansion
by
1991
.

The
system
currently
has
a
capacity
of
1.55
million
barrels
a
day
.

Inland
Steel
Industries
Inc.
expects
to
report
that
third-quarter
earnings
dropped
more
than
50
%
from
the
previous
quarter
as
a
result
of
reduced
sales
volume
and
increased
costs
.

In
the
second
quarter
,
the
steelmaker
had
net
income
of
$
45.3
million
or
$
1.25
a
share
,
including
a
pretax
charge
of
$
17
million
related
to
the
settlement
of
a
suit
,
on
sales
of
$
1.11
billion
.

The
company
said
normal
seasonal
softness
and
lost
orders
caused
by
prolonged
labor
talks
reduced
shipments
by
200,000
tons
in
the
latest
quarter
,
compared
with
the
second
quarter
.

At
the
same
time
,
the
integrated-steel
business
was
hurt
by
continued
increases
in
materials
costs
and
repair
and
maintenance
expenses
,
as
well
as
higher
labor
costs
under
its
new
contract
.

The
service-center
business
was
hurt
by
reduced
margins
and
start-up
costs
associated
with
its
Joseph
T.
Ryerson
&
Son
unit
.

The
company
said
it
is
beginning
to
see
some
shipping-rate
improvements
in
both
the
intergrated-steel
and
steel-service-center
segments
,
which
should
result
in
improved
results
for
the
fourth
quarter
.

Inland
said
its
third-quarter
results
will
be
announced
later
this
week
.

In
the
year-earlier
third
quarter
,
when
the
industry
was
in
the
midst
of
a
boom
,
the
company
had
net
of
$
61
million
,
or
$
1.70
a
share
,
on
sales
of
$
1.02
billion
.

Predicting
the
financial
results
of
computer
firms
has
been
a
tough
job
lately
.

Take
Microsoft
Corp.
,
the
largest
maker
of
personal
computer
software
and
generally
considered
an
industry
bellwether
.

In
July
,
the
company
stunned
Wall
Street
with
the
prediction
that
growth
in
the
personal
computer
business
overall
would
be
only
10
%
in
1990
,
a
modest
increase
when
compared
with
the
sizzling
expansion
of
years
past
.

Investors
--
taking
this
as
a
sign
that
a
broad
industry
slump
was
in
the
offing
--
reacted
by
selling
the
company
's
stock
,
which
lost
$
3.25
that
day
to
close
at
$
52
in
national
over-the-counter
trading
.

But
that
was
all
of
three
months
ago
.

Last
week
,
Microsoft
said
it
expects
revenue
for
its
first
quarter
ended
Sept.
30
to
increase
34
%
.

The
announcement
caused
the
company
's
stock
to
surge
$
6.50
to
close
at
$
75.50
a
share
.

Microsoft
's
surprising
strength
is
one
example
of
the
difficulty
facing
investors
looking
for
reassurances
about
the
financial
health
of
the
computer
firms
.

``
It
's
hard
to
know
what
to
expect
at
this
point
,
''
said
Peter
Rogers
,
an
analyst
at
Robertson
Stephens
&
Co
.

``
The
industry
defies
characterization
.
''

To
illustrate
,
Mr.
Rogers
said
that
of
the
14
computer-related
firms
he
follows
,
half
will
report
for
their
most
recent
quarter
earnings
below
last
year
's
results
,
and
half
above
those
results
.

Among
those
companies
expected
to
have
a
down
quarter
are
Hewlett-Packard
Co.
,
Amdahl
Corp.
and
Sun
Microsystems
Inc.
,
generally
solid
performers
in
the
past
.

International
Business
Machines
Corp.
also
is
expected
to
report
disappointing
results
.

Apple
Computer
Inc.
,
meanwhile
,
is
expected
to
show
improved
earnings
for
the
period
ended
Sept
.

Another
contradictory
message
comes
from
Businessland
Inc.
,
a
computer
retailer
.

In
July
,
the
company
reported
that
booming
sales
of
new
personal
computers
from
Apple
and
IBM
had
resulted
in
net
income
more
than
doubling
for
its
fourth
quarter
ended
June
30
to
$
7.4
million
,
or
23
cents
a
share
.

This
month
,
however
,
Businessland
warned
investors
that
results
for
its
first
quarter
ended
Sept.
30
had
n't
met
expectations
.

The
company
said
it
expects
earnings
of
14
to
17
cents
a
share
,
down
from
25
cents
a
share
in
the
year-earlier
period
.

While
the
earnings
picture
confuses
,
observers
say
the
major
forces
expected
to
shape
the
industry
in
the
coming
year
are
clearer
.

Companies
will
continue
to
war
over
standards
.

In
computer
publishing
,
a
battle
over
typefaces
is
hurting
Adobe
Systems
Inc.
,
which
sells
software
that
controls
the
image
produced
by
printers
and
displays
.

Until
recently
,
Adobe
had
a
lock
on
the
market
for
image
software
,
but
last
month
Apple
,
Adobe
's
biggest
customer
,
and
Microsoft
rebelled
.

Now
the
two
firms
are
collaborating
on
an
alternative
to
Adobe
's
approach
,
and
analysts
say
they
are
likely
to
carry
IBM
,
the
biggest
seller
of
personal
computers
,
along
with
them
.

The
short-term
outlook
for
Adobe
's
business
,
however
,
appears
strong
.

The
company
is
beginning
to
ship
a
new
software
program
that
's
being
heralded
as
a
boon
for
owners
of
low-end
printers
sold
by
Apple
.

The
program
is
aimed
at
improving
the
quality
of
printed
material
.

John
Warnock
,
Adobe
's
chief
executive
officer
,
said
the
Mountain
View
,
Calif.
,
company
has
been
receiving
1,000
calls
a
day
about
the
product
since
it
was
demonstrated
at
a
computer
publishing
conference
several
weeks
ago
.

Meanwhile
,
competition
between
various
operating
systems
,
which
control
the
basic
functions
of
a
computer
,
spells
trouble
for
software
firms
generally
.

``
It
creates
uncertainty
and
usually
slows
down
sales
,
''
said
Russ
Crabs
,
an
analyst
at
Soundview
Financial
Group
.

Mr.
Crabs
said
this
probably
is
behind
the
expected
weak
performance
of
Aldus
Corp.
,
maker
of
a
widely
used
computer
publishing
program
.

He
expects
Aldus
to
report
earnings
of
21
cents
a
share
on
revenues
of
$
19.5
million
for
its
third
quarter
,
compared
with
earnings
of
30
cents
a
share
on
revenue
of
20.4
million
in
the
year-earlier
period
.

Aldus
officials
could
n't
be
reached
for
comment
.

On
the
other
hand
,
the
battle
of
the
bus
is
expected
to
grow
increasingly
irrelevant
.

A
bus
is
the
data
highway
within
a
computer
.

IBM
is
backing
one
type
of
bus
called
microchannel
,
while
the
nine
other
leading
computer
makers
,
including
H-P
and
Compaq
Computer
Corp.
,
have
chosen
another
method
.

``
Users
do
n't
care
about
the
bus
,
''
said
Daniel
Benton
,
an
analyst
at
Goldman
,
Sachs
&
Co
.

He
said
Apple
's
family
of
Macintosh
computers
,
for
instance
,
uses
four
different
buses
``
and
no
one
seems
to
mind
.
''

The
gap
between
winners
and
laggards
will
grow
.

In
personal
computers
,
Apple
,
Compaq
and
IBM
are
expected
to
tighten
their
hold
on
their
business
.

At
the
same
time
,
second-tier
firms
will
continue
to
lose
ground
.

Some
lagging
competitors
even
may
leave
the
personal
computer
business
altogether
.

Wyse
Technology
,
for
instance
,
is
considered
a
candidate
to
sell
its
troubled
operation
.

``
Wyse
has
done
well
establishing
a
distribution
business
,
but
they
have
n't
delivered
products
that
sell
,
''
said
Kimball
Brown
,
an
analyst
at
Prudential-Bache
Securities
.

Mr.
Brown
estimates
Wyse
,
whose
terminals
business
is
strong
,
will
report
a
loss
of
12
cents
a
share
for
its
quarter
ended
Sept
.

Personal-computer
makers
will
continue
to
eat
away
at
the
business
of
more
traditional
computer
firms
.

Ever-more
powerful
desk-top
computers
,
designed
with
one
or
more
microprocessors
as
their
``
brains
,
''
are
expected
to
increasingly
take
on
functions
carried
out
by
more
expensive
minicomputers
and
mainframes
.

``
The
guys
that
make
traditional
hardware
are
really
being
obsoleted
by
microprocessor-based
machines
,
''
said
Mr.
Benton
.

As
a
result
of
this
trend
,
longtime
powerhouses
H-P
,
IBM
and
Digital
Equipment
Corp.
are
scrambling
to
counterattack
with
microprocessor-based
systems
of
their
own
.

But
they
will
have
to
act
quickly
.

Mr.
Benton
expects
Compaq
to
unveil
a
family
of
high-end
personal
computers
later
this
year
that
are
powerful
enough
to
serve
as
the
hub
for
communications
within
large
networks
of
desk-top
machines
.

A
raft
of
new
computer
companies
also
has
targeted
this
``
server
''
market
.

Population
Drain
Ends
For
Midwestern
States

IOWA
IS
MAKING
a
comeback
.

So
are
Indiana
,
Ohio
and
Michigan
.

The
population
of
all
four
states
is
on
the
upswing
,
according
to
new
Census
Bureau
estimates
,
following
declines
throughout
the
early
1980s
.

The
gains
,
to
be
sure
,
are
rather
small
.

Iowa
,
for
instance
,
saw
its
population
grow
by
11,000
people
,
or
0.4
%
,
between
1987
and
1988
,
the
Census
Bureau
says
.

Still
,
even
that
modest
increase
is
good
news
for
a
state
that
had
n't
grown
at
all
since
1981
.

Between
1987
and
1988
,
North
Dakota
was
the
only
state
in
the
Midwest
to
lose
population
,
a
loss
of
4,000
people
.

Six
of
the
12
midwestern
states
have
been
growing
steadily
since
1980
--
Illinois
,
Kansas
,
Minnesota
,
Missouri
,
South
Dakota
and
Wisconsin
.

The
Northeast
has
been
holding
its
own
in
the
population
race
.

Seven
of
nine
states
have
grown
each
year
since
1980
,
including
New
York
,
which
lost
4
%
of
its
population
during
the
1970s
.

And
although
Pennsylvania
and
Massachusetts
suffered
slight
declines
earlier
in
the
decade
,
they
are
growing
again
.

At
the
same
time
,
several
states
in
the
South
and
West
have
had
their
own
population
turnaround
.

Seven
states
that
grew
in
the
early
1980s
are
now
losing
population
--
West
Virginia
,
Mississippi
,
Louisiana
,
Oklahoma
,
Montana
,
Wyoming
and
Alaska
.

Overall
,
though
,
the
South
and
West
still
outpace
the
Northeast
and
Midwest
,
and
fast-growing
states
like
Florida
and
California
ensure
that
the
pattern
will
continue
.

But
the
growth
gap
between
the
Sun
Belt
and
other
regions
has
clearly
started
narrowing
.

More
Elderly
Maintain
Their
Independence

THANKS
TO
modern
medicine
,
more
couples
are
growing
old
together
.

And
even
after
losing
a
spouse
,
more
of
the
elderly
are
staying
independent
.

A
new
Census
Bureau
study
of
the
noninstitutionalized
population
shows
that
64
%
of
people
aged
65
to
74
were
living
with
a
spouse
in
1988
,
up
from
59
%
in
1970
.

This
does
n't
mean
they
're
less
likely
to
live
alone
,
however
.

That
share
has
remained
at
about
24
%
since
1970
.

What
has
changed
is
that
more
of
the
young
elderly
are
living
with
spouses
rather
than
with
other
relatives
,
such
as
children
.

In
1988
,
10
%
of
those
aged
65
to
74
lived
with
relatives
other
than
spouses
,
down
from
15
%
in
1970
.

As
people
get
even
older
,
many
become
widowed
.

But
even
among
those
aged
75
and
older
,
the
share
living
with
a
spouse
rose
slightly
,
to
40
%
in
1988
from
38
%
in
1970
.

Like
their
younger
counterparts
,
the
older
elderly
are
less
likely
to
live
with
other
relatives
.

Only
17
%
of
those
aged
75
and
older
lived
with
relatives
other
than
spouses
in
1988
,
down
from
26
%
in
1970
.

The
likelihood
of
living
alone
beyond
the
age
of
75
has
increased
to
40
%
from
32
%
.

More
people
are
remaining
independent
longer
presumably
because
they
are
better
off
physically
and
financially
.

Careers
Count
Most
For
the
Well-to-Do

MANY
AFFLUENT
people
place
personal
success
and
money
above
family
.

At
least
that
's
what
a
survey
by
Ernst
&
Young
and
Yankelovich
,
Clancy
,
Shulman
indicates
.

Two-thirds
of
respondents
said
they
strongly
felt
the
need
to
be
successful
in
their
jobs
,
while
fewer
than
half
said
they
strongly
felt
the
need
to
spend
more
time
with
their
families
.

Being
successful
in
careers
and
spending
the
money
they
make
are
top
priorities
for
this
group
.

Unlike
most
studies
of
the
affluent
market
,
this
survey
excluded
the
super-rich
.

Average
household
income
for
the
sample
was
$
194,000
,
and
average
net
assets
were
reported
as
$
775,000
.

The
goal
was
to
learn
about
one
of
today
's
fastest-growing
income
groups
,
the
upper-middle
class
.

Although
they
represent
only
2
%
of
the
population
,
they
control
nearly
one-third
of
discretionary
income
.

Across
the
board
,
these
consumers
value
quality
,
buy
what
they
like
rather
than
just
what
they
need
,
and
appreciate
products
that
are
distinctive
.

Despite
their
considerable
incomes
and
assets
,
40
%
of
the
respondents
in
the
study
do
n't
feel
financially
secure
,
and
one-fourth
do
n't
feel
that
they
have
made
it
.

Twenty
percent
do
n't
even
feel
they
are
financially
well
off
.

Many
of
the
affluent
are
n't
comfortable
with
themselves
,
either
.

About
40
%
do
n't
feel
they
're
more
able
than
others
.

While
twothirds
feel
some
guilt
about
being
affluent
,
only
25
%
give
$
2,500
or
more
to
charity
each
year
.

Thirty-five
percent
attend
religious
services
regularly
;
at
the
same
time
,
60
%
feel
that
in
life
one
sometimes
has
to
compromise
one
's
principles
.

Odds
and
Ends

THE
NUMBER
of
women
and
minorities
who
hold
jobs
in
top
management
in
the
nation
's
largest
banks
has
more
than
doubled
since
1978
.

The
American
Bankers
Association
says
that
women
make
up
47
%
of
officials
and
managers
in
the
top
50
banks
,
up
from
33
%
in
1978
.

The
share
of
minorities
in
those
positions
has
risen
to
16
%
from
12
%
...
.

Per-capita
personal
income
in
the
U.S.
grew
faster
than
inflation
last
year
,
according
to
the
Bureau
of
Economic
Analysis
.

The
amount
of
income
divvied
up
for
each
man
,
woman
and
child
was
$
16,489
in
1988
,
up
6.6
%
from
$
15,472
in
1987
.

Per
capita
personal
income
ranged
from
$
11,116
in
Mississippi
to
$
23,059
in
Connecticut
...
.

There
are
13.1
million
students
in
college
this
fall
,
up
2
%
from
1988
,
the
National
Center
for
Education
Statistics
estimates
.

About
54
%
are
women
,
and
44
%
are
part-time
students
.

This
small
Dallas
suburb
's
got
trouble
.

Trouble
with
a
capital
T
and
that
rhymes
with
P
and
that
stands
for
pool
.

More
than
30
years
ago
,
Prof.
Harold
Hill
,
the
con
man
in
Meredith
Willson
's
``
The
Music
Man
,
''
warned
the
citizens
of
River
City
,
Iowa
,
against
the
game
.

Now
kindred
spirits
on
Addison
's
town
council
have
barred
the
town
's
fanciest
hotel
,
the
Grand
Kempinski
,
from
installing
three
free
pool
tables
in
its
new
lounge
.

Mayor
Lynn
Spruill
and
two
members
of
the
council
said
they
were
worried
about
setting
a
precedent
that
would
permit
pool
halls
along
Addison
's
main
street
.

And
the
mayor
,
in
an
admonition
that
bears
a
rhythmic
resemblance
to
Prof.
Hill
's
,
warned
that
``
alcohol
leads
to
betting
,
which
leads
to
fights
.
''

The
council
's
action
is
yet
another
blow
to
a
sport
that
its
fans
claim
has
been
maligned
unjustly
for
years
.

``
Obviously
they
're
not
in
touch
with
what
's
going
on
,
''
says
Tom
Manske
,
vice
president
of
the
National
Pocket
Billiards
Association
.

Pool
is
hot
in
New
York
and
Chicago
,
he
insists
,
where
``
upscale
,
suit-and-tie
places
''
are
adding
tables
.

With
today
's
tougher
drunk
driving
laws
,
he
adds
,
``
people
do
n't
want
to
just
sit
around
and
drink
.
''

Besides
,
rowdy
behavior
seems
unlikely
at
the
Grand
Kempinski
,
where
rooms
average
$
200
a
night
and
the
cheap
mixed
drinks
go
for
$
3.50
a
pop
.

At
the
lounge
,
manager
Elizabeth
Dyer
wo
n't
admit
patrons
in
jeans
,
T-shirts
or
tennis
shoes
.

But
a
majority
of
the
Addison
council
did
n't
buy
those
arguments
.

Introducing
pool
,
argued
Councilwoman
Riley
Reinker
,
would
be
``
dangerous
.

It
would
open
a
can
of
worms
.
''

Addison
is
no
stranger
to
cans
of
worms
,
either
.

After
its
previous
mayor
committed
suicide
last
year
,
an
investigation
disclosed
that
town
officials
regularly
voted
on
their
own
projects
,
gave
special
favors
to
developer
friends
and
dipped
into
the
town
's
coffers
for
trips
and
retreats
.

The
revelations
embarrassed
town
officials
,
although
they
argued
that
the
problems
were
n't
as
severe
as
the
media
suggested
.

Now
comes
the
pool
flap
.

``
I
think
there
's
some
people
worried
about
something
pretty
ridiculous
,
''
Councilman
John
Nolan
says
.

``
I
thought
this
was
all
taken
care
of
in
`
The
Music
Man
.

The
only
thing
Robert
Goldberg
could
praise
about
CBS
's
new
show
``
Island
Son
''
(
Leisure
&
Arts
,
Sept.
25
)
was
the
local
color
;
unfortunately
neither
he
nor
the
producers
of
the
show
have
done
their
homework
.

For
instance
:
``
Haole
''
(
white
)
is
not
the
ultimate
insult
;
``
Mainland
haole
''
is
.

Richard
Chamberlain
dresses
as
a
``
Mainland
haole
,
''
tucking
in
a
Hawaiian
shirt
and
rolling
up
its
long
sleeves
.

And
the
local
expression
for
brother
is
``
brah
,
''
not
``
bruddah
.
''

And
even
if
a
nurse
would
wear
flowers
in
her
hair
while
on
duty
,
if
she
were
engaged
she
would
know
to
wear
them
behind
her
left
,
not
right
,
ear
.

Sorry
,
the
show
does
not
even
have
the
one
redeeming
quality
of
genuine
local
color
.

Anita
Davis

Of
all
the
ethnic
tensions
in
America
,
which
is
the
most
troublesome
right
now
?

A
good
bet
would
be
the
tension
between
blacks
and
Jews
in
New
York
City
.

Or
so
it
must
seem
to
Jackie
Mason
,
the
veteran
Jewish
comedian
appearing
in
a
new
ABC
sitcom
airing
on
Tuesday
nights
(
9:30-10
p.m.
EDT
)
.

Not
only
is
Mr.
Mason
the
star
of
``
Chicken
Soup
,
''
he
's
also
the
inheritor
of
a
comedic
tradition
dating
back
to
``
Duck
Soup
,
''
and
he
's
currently
a
man
in
hot
water
.

Here
,
in
neutral
language
,
is
the
gist
of
Mr.
Mason
's
remarks
,
quoted
first
in
the
Village
Voice
while
he
was
a
paid
spokesman
for
the
Rudolph
Giuliani
mayoral
campaign
,
and
then
in
Newsweek
after
he
and
the
campaign
parted
company
.

Mr.
Mason
said
that
many
Jewish
voters
feel
guilty
toward
blacks
,
so
they
support
black
candidates
uncritically
.

He
said
that
many
black
voters
feel
bitter
about
racial
discrimination
,
so
they
,
too
,
support
black
candidates
uncritically
.

He
said
that
Jews
have
contributed
more
to
black
causes
over
the
years
than
vice
versa
.

Of
course
,
Mr.
Mason
did
not
use
neutral
language
.

As
a
practitioner
of
ethnic
humor
from
the
old
days
on
the
Borscht
Belt
,
live
television
and
the
nightclub
circuit
,
Mr.
Mason
instinctively
reached
for
the
vernacular
.

He
said
Jews
were
``
sick
with
complexes
''
;
and
he
called
David
Dinkins
,
Mr.
Giuliani
's
black
opponent
,
``
a
fancy
shvartze
with
a
mustache
.
''

If
Mr.
Mason
had
used
less
derogatory
language
to
articulate
his
amateur
analysis
of
the
voting
behavior
of
his
fellow
New
Yorkers
,
would
the
water
be
quite
so
hot
?

It
probably
would
,
because
few
or
none
of
the
people
upset
by
Mr.
Mason
's
remarks
have
bothered
to
distinguish
between
the
substance
of
his
comments
and
the
fact
that
he
used
insulting
language
.

In
addition
,
some
of
Mr.
Mason
's
critics
have
implied
that
his
type
of
ethnic
humor
is
itself
a
form
of
racism
.

For
example
,
the
New
York
state
counsel
for
the
NAACP
said
that
Mr.
Mason
is
``
like
a
dinosaur
.

People
are
fast
leaving
the
place
where
he
is
stuck
.
''

These
critics
fail
to
distinguish
between
the
type
of
ethnic
humor
that
aims
at
disparaging
another
group
,
such
as
``
Polish
jokes
''
;
and
the
type
that
is
double-edged
,
aiming
inward
as
well
as
outward
.

The
latter
typically
is
the
humor
of
the
underdog
,
and
it
was
perfected
by
both
blacks
and
Jews
on
the
minstrel
and
vaudeville
stage
as
a
means
of
mocking
their
white
and
gentile
audiences
along
with
themselves
.

In
the
hands
of
a
zealot
like
Lenny
Bruce
,
this
double-edged
blade
could
cut
both
the
self
and
the
audience
to
ribbons
.

But
wielded
by
a
pro
like
Jackie
Mason
,
it
is
a
constructive
form
of
mischief
.

Why
constructive
?

Because
despite
all
the
media
prattle
about
comedy
and
politics
not
mixing
,
they
are
similar
in
one
respect
:
Both
can
serve
as
mechanisms
for
easing
tensions
and
facilitating
the
co-existence
of
groups
in
conflict
.

That
's
why
it
's
dangerous
to
have
well-intentioned
thought
police
,
on
college
campuses
and
elsewhere
,
taboo
all
critical
mention
of
group
differences
.

As
Elizabeth
Kristol
wrote
in
the
New
York
Times
just
before
the
Mason
donnybrook
,
``
Perhaps
intolerance
would
not
boil
over
with
such
intensity
if
honest
differences
were
allowed
to
simmer
.
''

The
question
is
,
if
group
conflicts
still
exist
(
as
undeniably
they
do
)
,
and
if
Mr.
Mason
's
type
of
ethnic
humor
is
passe
,
then
what
other
means
do
we
have
for
letting
off
steam
?

Do
n't
say
the
TV
sitcom
,
because
that
happens
to
be
a
genre
that
,
in
its
desperate
need
to
attract
everybody
and
offend
nobody
,
resembles
politics
more
than
it
does
comedy
.

It
is
true
that
the
best
sitcoms
do
allow
group
differences
to
simmer
:
yuppies
vs.
blue-collar
Bostonians
in
``
Cheers
''
;
children
vs.
adults
in
``
The
Cosby
Show
.
''

But
these
are
not
the
differences
that
make
headlines
.

In
``
Chicken
Soup
,
''
Mr.
Mason
plays
Jackie
,
a
Jewish
bachelor
courting
Maddie
(
Lynn
Redgrave
)
,
an
Irish
widow
and
mother
of
three
,
against
the
wishes
of
his
mother
(
Rita
Karin
)
and
her
brother
Michael
(
Brandon
Maggart
)
.

It
's
worth
noting
that
both
disapproving
relatives
are
immigrants
.

At
least
,
they
both
speak
with
strong
accents
,
as
do
Jackie
and
Maddie
.

It
could
n't
be
more
obvious
that
``
Chicken
Soup
''
is
being
made
from
an
old
recipe
.

And
a
safe
one
--
imagine
if
the
romance
in
question
were
between
an
Orthodox
Jew
and
a
member
of
the
Nation
of
Islam
.

Back
in
the
1920s
,
the
play
and
movie
versions
of
``
Abie
's
Irish
Rose
''
made
the
theme
of
courtship
between
the
assimilated
offspring
of
Jewish
and
Irish
immigrants
so
popular
that
its
author
,
Anne
Nichols
,
lost
a
plagiarism
suit
on
the
grounds
that
the
plot
has
entered
the
public
domain
.

And
it
has
remained
there
,
as
evidenced
by
its
reappearance
in
a
1972
CBS
sitcom
called
``
Bridget
Loves
Bernie
,
''
whose
sole
distinction
was
that
it
led
to
the
real-life
marriage
of
Meredith
Baxter
and
David
Birney
.

Clearly
,
the
question
with
``
Chicken
Soup
''
is
not
whether
the
pot
will
boil
over
,
but
whether
it
will
simmer
at
all
.

So
far
,
the
bubbles
have
been
few
and
far
between
.

Part
of
the
problem
is
the
tendency
of
all
sitcoms
,
ever
since
the
didactic
days
of
Norman
Lear
,
to
preach
about
social
issues
.

To
some
extent
,
this
tendency
emerges
whenever
the
show
tries
to
enlighten
us
about
ethnic
stereotypes
by
reversing
them
.

For
instance
,
Michael
dislikes
Jackie
not
because
he
's
a
shrewd
Jewish
businessman
,
but
because
he
quits
his
well-paying
job
as
a
salesman
in
order
to
become
a
social
worker
.

Even
more
problematic
is
the
incompatibility
between
sitcom
preachiness
and
Mr.
Mason
's
comic
persona
.

The
best
moments
in
the
show
occur
at
the
beginning
and
the
end
(
and
occasionally
in
the
middle
)
,
when
Mr.
Mason
slips
into
his
standup
mode
and
starts
meting
out
that
old-fashioned
Jewish
mischief
to
other
people
as
well
as
to
himself
.

But
too
often
,
these
routines
lack
spark
because
this
sitcom
,
like
all
sitcoms
,
is
timid
about
confronting
Mr.
Mason
's
stock
in
trade
-
ethnic
differences
.

I
'm
not
suggesting
that
the
producers
start
putting
together
episodes
about
topics
like
the
Catholic-Jewish
dispute
over
the
Carmelite
convent
at
Auschwitz
.

That
issue
,
like
racial
tensions
in
New
York
City
,
will
have
to
cool
down
,
not
heat
up
,
before
it
can
simmer
.

But
I
am
suggesting
that
they
stop
requiring
Mr.
Mason
to
interrupt
his
classic
shtik
with
some
line
about
``
caring
for
other
people
''
that
would
sound
shmaltzy
on
the
lips
of
Miss
America
.

At
your
age
,
Jackie
,
you
ought
to
know
that
you
ca
n't
make
soup
without
turning
up
the
flame
.

The
official
White
House
reaction
to
a
plunge
in
stock
prices
has
a
60-year
history
of
calm
,
right
up
through
Friday
.

Treasury
Secretary
Nicholas
Brady
said
in
a
statement
Friday
that
the
stock-market
decline
``
does
n't
signal
any
fundamental
change
in
the
condition
of
the
economy
.
''

``
The
economy
,
''
he
added
,
``
remains
well-balanced
and
the
outlook
is
for
continued
moderate
growth
.
''

Sound
familiar
?

Here
's
what
Ronald
Reagan
said
after
the
1987
crash
:
``
The
underlying
economy
remains
sound
.

There
is
nothing
wrong
with
the
economy
...
all
the
indices
are
up
.
''

Heard
that
before
?

After
the
1929
crash
,
Herbert
Hoover
said
:
``
The
fundamental
business
of
the
country
...
is
on
a
sound
and
prosperous
basis
.

James
Robinson
,
57
years
old
,
was
elected
president
and
chief
executive
officer
of
this
maker
of
magnetic
recording
heads
for
disk
drives
.

He
has
been
president
and
chief
executive
officer
of
Amperex
Electronics
Corp.
,
a
division
of
North
American
Philips
Corp.
,
itself
a
subsidiary
of
N.V
.
Philips
of
the
Netherlands
.

Charles
J.
Lawson
Jr.
,
68
,
who
had
been
acting
chief
executive
since
June
14
,
will
continue
as
chairman
.

The
former
president
and
chief
executive
,
Eric
W.
Markrud
,
resigned
in
June
.

The
Senate
's
decision
to
approve
a
bare-bones
deficit-reduction
bill
without
a
capital-gains
tax
cut
still
leaves
open
the
possibility
of
enacting
a
gains
tax
reduction
this
year
.

Late
Friday
night
,
the
Senate
voted
87-7
to
approve
an
estimated
$
13.5
billion
measure
that
had
been
stripped
of
hundreds
of
provisions
that
would
have
widened
,
rather
than
narrowed
,
the
federal
budget
deficit
.

Lawmakers
drastically
streamlined
the
bill
to
blunt
criticism
that
it
was
bloated
with
special-interest
tax
breaks
and
spending
increases
.

``
We
're
putting
a
deficit-reduction
bill
back
in
the
category
of
being
a
deficit-reduction
bill
,
''
said
Senate
Budget
Committee
Chairman
James
Sasser
(
D.
,
Tenn
.
)
.

But
Senate
supporters
of
the
trimmer
legislation
said
that
other
bills
would
soon
be
moving
through
Congress
that
could
carry
some
of
the
measures
that
had
been
cast
aside
,
including
a
capital-gains
tax
cut
.

In
addition
,
the
companion
deficit-reduction
bill
already
passed
by
the
House
includes
a
capital-gains
provision
.

House-Senate
negotiations
are
likely
to
begin
at
midweek
and
last
for
a
while
.

``
No
one
can
predict
exactly
what
will
happen
on
the
House
side
,
''
said
Senate
Minority
Leader
Robert
Dole
(
R.
,
Kan
.
)
.

But
,
he
added
,
``
I
believe
Republicans
and
Democrats
will
work
together
to
get
capital-gains
reform
this
year
.
''

White
House
Budget
Director
Richard
Darman
told
reporters
yesterday
that
the
administration
would
n't
push
to
keep
the
capital-gains
cut
in
the
final
version
of
the
bill
.

``
We
do
n't
need
this
as
a
way
to
get
capital
gains
,
''
he
said
.

House
Budget
Committee
Chairman
Leon
Panetta
(
D.
,
Calif
.
)
said
in
an
interview
,
``
If
that
's
the
signal
that
comes
from
the
White
House
,
that
will
help
a
great
deal
.
''

The
Senate
's
decision
was
a
setback
for
President
Bush
and
will
make
approval
of
a
capital-gains
tax
cut
less
certain
this
year
.

Opponents
of
the
cut
are
playing
hardball
.

Senate
Majority
Leader
George
Mitchell
(
D.
,
Maine
)
said
he
was
``
confident
''
that
any
House-Senate
agreement
on
the
deficit-reduction
legislation
would
n't
include
a
capital-gains
tax
cut
.

And
a
senior
aide
to
the
House
Ways
and
Means
Committee
,
where
tax
legislation
originates
,
said
there
are
n't
any
``
plans
to
produce
another
tax
bill
that
could
carry
a
gains
tax
cut
this
year
.
''

One
obvious
place
to
attach
a
capital-gains
tax
cut
,
and
perhaps
other
popular
items
stripped
from
the
deficit-reduction
bill
,
is
the
legislation
to
raise
the
federal
borrowing
limit
.

Such
legislation
must
be
enacted
by
the
end
of
the
month
.

The
Senate
bill
was
pared
back
in
an
attempt
to
speed
deficit-reduction
through
Congress
.

Because
the
legislation
has
n't
been
completed
,
President
Bush
has
until
midnight
tonight
to
enact
across-the-board
spending
cuts
mandated
by
the
Gramm-Rudman
deficit-reduction
law
.

Senators
hope
that
the
need
to
avoid
those
cuts
will
pressure
the
House
to
agree
to
the
streamlined
bill
.

The
House
appears
reluctant
to
join
the
senators
.

A
key
is
whether
House
Republicans
are
willing
to
acquiesce
to
their
Senate
colleagues
'
decision
to
drop
many
pet
provisions
.

``
Although
I
am
encouraged
by
the
Senate
action
,
''
said
Chairman
Dan
Rostenkowski
(
D.
,
Ill
.
)
of
the
House
Ways
and
Means
Committee
,
``
it
is
uncertain
whether
a
clean
bill
can
be
achieved
in
the
upcoming
conference
with
the
Senate
.
''

Another
big
question
hovering
over
the
debate
is
what
President
Bush
thinks
.

He
has
been
resisting
a
stripped-down
bill
without
a
guaranteed
vote
on
his
capital-gains
tax
cut
.

But
Republican
senators
saw
no
way
to
overcome
a
procedural
hurdle
and
garner
the
60
votes
needed
to
win
the
capital-gains
issue
on
the
floor
,
so
they
went
ahead
with
the
streamlined
bill
.

The
Senate
bill
was
stripped
of
many
popular
,
though
revenue-losing
,
provisions
,
a
number
of
which
are
included
in
the
House-passed
bill
.

These
include
a
child-care
initiative
and
extensions
of
soon-to-expire
tax
breaks
for
low-income
housing
and
research-and-development
expenditures
.

Also
missing
from
the
Senate
bill
is
the
House
's
repeal
of
a
law
,
called
Section
89
,
that
compels
companies
to
give
rank-and-file
workers
comparable
health
benefits
to
top
paid
executives
.

One
high-profile
provision
that
was
originally
in
the
Senate
bill
but
was
cut
out
because
it
lost
money
was
the
proposal
by
Chairman
Lloyd
Bentsen
(
D.
,
Texas
)
of
the
Senate
Finance
Committee
to
expand
the
deduction
for
individual
retirement
accounts
.

Mr.
Bentsen
said
he
hopes
the
Senate
will
consider
that
measure
soon
.

To
the
delight
of
some
doctors
,
the
bill
dropped
a
plan
passed
by
the
Finance
Committee
that
would
have
overhauled
the
entire
physician-reimbursement
system
under
Medicare
.

To
the
detriment
of
many
low-income
people
,
efforts
to
boost
Medicaid
funding
,
especially
in
rural
areas
,
also
were
stricken
.

Asked
why
senators
were
giving
up
so
much
,
New
Mexico
Sen.
Pete
Domenici
,
the
ranking
Republican
on
the
Senate
Budget
Committee
,
said
,
``
We
're
looking
like
idiots
.

Things
had
just
gone
too
far
.
''

Sen.
Dole
said
that
the
move
required
sacrifice
by
every
senator
.

It
worked
,
others
said
,
because
there
were
no
exceptions
:
all
revenue-losing
provisions
were
stricken
.

The
Senate
also
dropped
a
plan
by
its
Finance
Committee
that
would
have
increased
the
income
threshold
beyond
which
senior
citizens
have
their
Social
Security
benefits
reduced
.

In
addition
,
the
bill
dropped
a
plan
to
make
permanent
a
3
%
excise
tax
on
long-distance
telephone
calls
.

It
no
longer
includes
a
plan
that
would
have
repealed
what
remains
of
the
completed-contract
method
of
accounting
,
which
is
used
by
military
contractors
to
reduce
their
tax
burden
.

It
also
drops
a
provision
that
would
have
permitted
corporations
to
use
excess
pension
funds
to
pay
health
benefits
for
current
retirees
.

Also
stricken
was
a
fivefold
increase
in
the
maximum
Occupational
Safety
and
Health
Administration
penalties
,
which
would
have
raised
$
65
million
in
fiscal
1990
.

A
provision
that
would
have
made
the
Social
Security
Administration
an
independent
agency
was
excised
.

The
approval
of
the
Senate
bill
was
especially
sweet
for
Sen.
Mitchell
,
who
had
proposed
the
streamlining
.

Mr.
Mitchell
's
relations
with
Budget
Director
Darman
,
who
pushed
for
a
capital-gains
cut
to
be
added
to
the
measure
,
have
been
strained
since
Mr.
Darman
chose
to
bypass
the
Maine
Democrat
and
deal
with
other
lawmakers
earlier
this
year
during
a
dispute
over
drug
funding
in
the
fiscal
1989
supplemental
spending
bill
.

The
deficit
reduction
bill
contains
$
5.3
billion
in
tax
increases
in
fiscal
1990
,
and
$
26
billion
over
five
years
.

The
revenue-raising
provisions
,
which
affect
mostly
corporations
,
would
:

--
Prevent
companies
that
have
made
leveraged
buy-outs
from
getting
federal
tax
refunds
resulting
from
losses
caused
by
interest
payments
on
debt
issued
to
finance
the
buy-outs
,
effective
Aug.
2
,
1989
.

--
Require
mutual
funds
to
include
in
their
taxable
income
dividends
paid
to
them
on
the
date
that
the
dividends
are
declared
rather
than
received
,
effective
the
day
after
the
tax
bill
is
enacted
.

--
Close
a
loophole
regarding
employee
stock
ownership
plans
,
effective
June
6
,
1989
,
that
has
been
exploited
by
investment
bankers
in
corporate
takeovers
.

The
measure
repeals
a
50
%
exclusion
given
to
banks
on
the
interest
from
loans
used
to
acquire
securities
for
an
ESOP
,
if
the
ESOP
owns
less
than
30
%
of
the
employer
's
stock
.

--
Curb
junk
bonds
by
ending
tax
benefits
for
certain
securities
,
such
as
zero-coupon
bonds
,
that
postpone
cash
interest
payments
.

--
Raise
$
851
million
by
suspending
for
one
year
an
automatic
reduction
in
airport
and
airway
taxes
.

--
Speed
up
the
collection
of
the
payroll
tax
from
large
companies
,
effective
August
1990
.

--
Impose
a
tax
on
ozone-depleting
chemicals
,
such
as
those
used
in
air
conditioners
and
in
Styrofoam
,
beginning
at
$
1.10
a
pound
starting
next
year
.

--
Withhold
income
taxes
from
the
paychecks
of
certain
farm
workers
currently
exempt
from
withholding
.

--
Change
the
collection
of
gasoline
excise
taxes
to
weekly
from
semimonthly
,
effective
next
year
.

--
Restrict
the
ability
of
real
estate
owners
to
escape
taxes
by
swapping
one
piece
of
property
for
another
instead
of
selling
it
for
cash
.

--
Increase
to
$
6
a
person
from
$
3
the
international
air-passenger
departure
tax
,
and
impose
a
$
3-a-person
tax
on
international
departures
by
commercial
ships
.

The
measure
also
includes
spending
cuts
and
increases
in
federal
fees
.

Among
its
provisions
:

--
Reduction
of
Medicare
spending
in
fiscal
1990
by
some
$
2.8
billion
,
in
part
by
curbing
increases
in
reimbursements
to
physicians
.

The
plan
would
impose
a
brief
freeze
on
physician
fees
next
year
.

--
Removal
of
the
U.S.
Postal
Service
's
operating
budget
from
the
federal
budget
,
reducing
the
deficit
by
$
1.77
billion
.

A
similar
provision
is
in
the
House
version
.

--
Authority
for
the
Federal
Aviation
Administration
to
raise
$
239
million
by
charging
fees
for
commercial
airline-landing
rights
at
New
York
's
LaGuardia
and
John
F.
Kennedy
International
Airports
,
O'Hare
International
Airport
in
Chicago
and
National
Airport
in
Washington
.

--
Increases
in
Nuclear
Regulatory
Commission
fees
totaling
$
54
million
.

--
Direction
to
the
U.S.
Coast
Guard
to
collect
$
50
million
from
users
of
Coast
Guard
services
.

--
Raising
an
additional
$
43
million
by
increasing
existing
Federal
Communications
Commission
fees
and
penalties
and
establishing
new
fees
for
amateur
radio
operators
,
ship
stations
and
mobile
radio
facilities
.

John
E.
Yang
contributed
to
this
article
.

In
response
to
your
overly
optimistic
,
outdated
piece
on
how
long
unemployment
lasts
(
People
Patterns
,
Sept.
20
)
:
I
am
in
the
communications
field
,
above
entry
level
.

I
was
laid
off
in
August
1988
,
and
after
a
thorough
and
exhausting
job
search
,
was
hired
in
August
1989
.

My
unemployment
insurance
ran
out
before
I
found
a
job
;
I
found
cutbacks
and
layoffs
in
many
companies
.

The
statistics
quoted
by
the
``
new
''
Census
Bureau
report
(
garnered
from
1984
to
1986
)
are
out
of
date
,
certainly
as
an
average
for
the
Northeast
,
and
possibly
for
the
rest
of
the
country
.

I
think
what
bothered
me
most
about
the
piece
was
that
there
seemed
to
be
an
underlying
attitude
to
tell
your
readers
all
is
well
--
if
you
're
getting
laid
off
do
n't
worry
,
and
if
you
're
unemployed
,
it
's
a
seller
's
market
.

To
top
it
off
,
you
captioned
the
graph
showing
the
average
number
of
months
in
a
job
search
as
``
Time
Off
.
''

Are
you
kidding
?

Looking
for
a
job
was
one
of
the
most
anxious
periods
of
my
life
--
and
is
for
most
people
.

Your
paper
needs
a
serious
reality
check
.

Reva
Levin

Cambridge
,
Mass
.

BULL
HN
INFORMATION
SYSTEMS
Inc.
is
a
U.S.
majority-owned
unit
of
Cie.
des
Machines
Bull
.

In
Friday
's
edition
,
the
name
of
the
unit
was
misstated
.

Moody
's
Investors
Service
said
it
reduced
its
rating
on
$
165
million
of
subordinated
debt
of
this
Beverly
Hills
,
Calif.
,
thrift
,
citing
turmoil
in
the
market
for
low-grade
,
high-yield
securities
.

The
agency
said
it
reduced
its
rating
on
the
thrift
's
subordinated
debt
to
B-2
from
Ba-2
and
will
keep
the
debt
under
review
for
possible
further
downgrade
.

Columbia
Savings
is
a
major
holder
of
so-called
junk
bonds
.

New
federal
legislation
requires
that
all
thrifts
divest
themselves
of
such
speculative
securities
over
a
period
of
years
.

Columbia
Savings
officials
were
n't
available
for
comment
on
the
downgrade
.

FRANKLIN
SAVINGS
ASSOCIATION
(
Ottawa
,
Kan.
)
--

Moody
's
Investors
Service
Inc.
said
it
downgraded
its
rating
to
B-2
from
Ba-3
on
less
than
$
20
million
of
this
thrift
's
senior
subordinated
notes
.

The
rating
concern
said
Franklin
's
``
troubled
diversification
record
in
the
securities
business
''
was
one
reason
for
the
downgrade
,
citing
the
troubles
at
its
L.F.
Rothschild
subsidiary
and
the
possible
sale
of
other
subsidiaries
.

``
They
perhaps
had
concern
that
we
were
getting
out
of
all
these
,
''
said
Franklin
President
Duane
H.
Hall
.

``
I
think
it
was
a
little
premature
on
their
part
.

Just
when
it
seemed
safe
to
go
back
into
stocks
,
Wall
Street
suffered
another
severe
attack
of
nerves
.

Does
this
signal
another
Black
Monday
is
coming
?

Or
is
this
an
extraordinary
buying
opportunity
,
just
like
Oct.
19
,
1987
,
eventually
turned
out
to
be
?

Here
's
what
several
leading
market
experts
and
money
managers
say
about
Friday
's
action
,
what
happens
next
and
what
investors
should
do
.

Joseph
Granville
.

``
I
'm
the
only
one
who
said
there
would
be
an
October
massacre
,
all
through
late
August
and
September
,
''
says
Mr.
Granville
,
once
a
widely
followed
market
guru
and
still
a
well-known
newsletter
writer
.

``
Everyone
will
tell
you
that
this
time
is
different
from
1987
,
''
he
says
.

``
Well
,
in
some
ways
it
is
different
,
but
technically
it
is
just
the
same
.

If
you
're
a
technician
,
you
obey
the
signals
.

Right
now
they
're
telling
me
to
get
the
hell
out
and
stay
out
.

I
see
no
major
support
until
2200
.

I
see
a
possibility
of
going
to
2200
this
month
.
''

Mr.
Granville
says
he
would
n't
even
think
of
buying
until
at
least
600
to
700
stocks
have
hit
52-week
lows
;
about
100
stocks
hit
new
lows
Friday
.

``
Most
people
,
''
he
says
,
``
have
no
idea
what
a
massacre
pattern
looks
like
.
''

Elaine
Garzarelli
.

A
quantitative
analyst
with
Shearson
Lehman
Hutton
Inc.
,
Ms.
Garzarelli
had
warned
clients
to
take
their
money
out
of
the
market
before
the
1987
crash
.

Friday
's
big
drop
,
she
says
,
``
was
not
a
crash
.

This
was
an
October
massacre
''
like
those
that
occurred
in
1978
and
1979
.

Now
,
as
in
those
two
years
,
her
stock
market
indicators
are
positive
.

So
she
thinks
the
damage
will
be
short-lived
and
contained
.

``
Those
corrections
lasted
one
to
four
weeks
and
took
the
market
10%-12
%
down
,
''
she
says
.

``
This
is
exactly
the
same
thing
,
as
far
as
I
'm
concerned
.
''

Thus
,
she
says
,
if
the
Dow
Jones
Industrial
Average
dropped
below
2450
,
``
It
would
just
be
a
fluke
.

My
advice
is
to
buy
.
''

As
she
calculates
it
,
the
average
stock
now
sells
for
about
12.5
times
companies
'
earnings
.

She
says
that
ratio
could
climb
to
14.5
,
given
current
interest
rates
,
and
still
be
within
the
range
of
``
fair
value
.
''

Ned
Davis
.

Friday
's
fall
marks
the
start
of
a
bear
market
,
says
Mr.
Davis
,
president
of
Ned
Davis
Research
Inc
.

But
Mr.
Davis
,
whose
views
are
widely
respected
by
money
managers
,
says
he
expects
no
1987-style
crash
.

``
There
was
a
unique
combination
in
1987
,
''
he
says
.

``
Margin
debt
was
at
a
record
high
.

There
was
tremendous
public
enthusiasm
for
stock
mutual
funds
.

The
main
thing
was
portfolio
insurance
,
''
a
mechanical
trading
system
intended
to
protect
an
investor
against
losses
.
``

A
hundred
billion
dollars
in
stock
was
subject
''
to
it
.

In
1987
,
such
selling
contributed
to
a
snowball
effect
.

Today
could
even
be
an
up
day
,
Mr.
Davis
says
,
if
major
brokerage
firms
agree
to
refrain
from
program
trading
.

Over
the
next
several
months
,
though
,
he
says
things
look
bad
.

``
I
think
the
market
will
be
heading
down
into
November
,
''
he
says
.

``
We
will
probably
have
a
year-end
rally
,
and
then
go
down
again
.

Sort
of
a
two-step
bear
market
.
''

He
expects
the
downturn
to
carry
the
Dow
Jones
Industrial
Average
down
to
around
2000
sometime
next
year
.

``
That
would
be
a
normal
bear
market
,
''
he
says
.

``
I
guess
that
's
my
forecast
.
''

Leon
G.
Cooperman
.

``
I
do
n't
think
the
market
is
going
through
another
October
'87
.

I
do
n't
think
that
's
the
case
at
all
,
''
says
Mr.
Cooperman
,
a
partner
at
Goldman
,
Sachs
&
Co.
and
chairman
of
Goldman
Sachs
Asset
Management
.

Mr.
Cooperman
sees
this
as
a
good
time
to
pick
up
bargains
,
but
he
does
n't
think
there
's
any
need
to
rush
.

``
I
expect
the
market
to
open
weaker
Monday
,
but
then
it
should
find
some
stability
.
''

He
ticks
off
several
major
differences
between
now
and
two
years
ago
.

Unlike
1987
,
interest
rates
have
been
falling
this
year
.

Unlike
1987
,
the
dollar
has
been
strong
.

And
unlike
1987
,
the
economy
does
n't
appear
to
be
in
any
danger
of
overheating
.

But
the
economy
's
slower
growth
this
year
also
means
the
outlook
for
corporate
profits
``
is
n't
good
,
''
he
says
.

``
So
it
's
a
very
mixed
bag
.
''

Thus
,
he
concludes
,
``
This
is
not
a
good
environment
to
be
fully
invested
''
in
stocks
.

``
If
I
had
come
into
Friday
on
margin
or
with
very
little
cash
in
the
portfolios
,
I
would
not
do
any
buying
.

But
we
came
into
Friday
with
a
conservative
portfolio
,
so
I
would
look
to
do
some
modest
buying
''
on
behalf
of
clients
.
``

We
're
going
to
look
for
some
of
the
better-known
companies
that
got
clocked
''
Friday
.

John
Kenneth
Galbraith
.

``
This
is
the
latest
manifestation
of
the
capacity
of
the
financial
community
for
recurrent
insanity
,
''
says
Mr.
Galbraith
,
an
economist
.

``
I
see
this
as
a
reaction
to
the
whole
junk
bond
explosion
,
''
he
says
.

``
The
explosion
of
junk
bonds
and
takeovers
has
lodged
a
lot
of
insecure
securities
in
the
hands
of
investors
and
loaded
the
corporations
that
are
the
objects
of
takeovers
or
feared
takeovers
with
huge
amounts
of
debt
rather
than
equity
.

This
has
both
made
investors
uneasy
and
the
corporations
more
vulnerable
.
''

Nevertheless
,
he
says
a
depression
does
n't
appear
likely
.

``
There
is
more
resiliency
in
the
economy
at
large
than
we
commonly
suppose
,
''
he
says
.

``
It
takes
more
error
now
to
have
a
major
depression
than
back
in
the
Thirties
--
much
as
the
financial
community
and
the
government
may
try
.
''

Mario
Gabelli
.

New
York
money
manager
Mario
Gabelli
,
an
expert
at
spotting
takeover
candidates
,
says
that
takeovers
are
n't
totally
gone
.

``
Companies
are
still
going
to
buy
companies
around
the
world
,
''
he
says
.

Examples
are
``
Ford
looking
at
Jaguar
,
BellSouth
looking
at
LIN
Broadcasting
.
''

These
sorts
of
takeovers
do
n't
require
junk
bonds
or
big
bank
loans
to
finance
them
,
so
Mr.
Gabelli
figures
they
will
continue
.

``
The
market
was
up
35
%
since
{
President
}
Bush
took
office
,
''
Mr.
Gabelli
says
,
so
a
correction
was
to
be
expected
.

He
thinks
another
crash
is
``
unlikely
,
''
and
says
he
was
``
nibbling
at
''
selected
stocks
during
Friday
's
plunge
.

``
Stocks
that
were
thrown
out
just
on
an
emotional
basis
are
a
great
opportunity
{
this
}
week
for
guys
like
me
,
''
he
says
.

Jim
Rogers
.

``
It
seems
to
me
that
this
is
the
pin
that
has
finally
pricked
the
balloon
,
''
says
Mr.
Rogers
,
a
professor
of
finance
at
Columbia
University
and
former
co-manager
of
one
of
the
most
successful
hedge
funds
in
history
,
Quantum
Fund
.

He
sees
``
economic
problems
,
financial
problems
''
ahead
for
the
U.S.
,
with
a
fairly
strong
possibility
of
a
recession
.

``
Friday
you
could
n't
sell
dollars
,
''
he
says
.

Dealers
``
would
give
you
a
quote
,
but
then
refuse
to
make
the
trade
.
''

If
the
dollar
stays
weak
,
he
says
,
that
will
add
to
inflationary
pressures
in
the
U.S.
and
make
it
hard
for
the
Federal
Reserve
Board
to
ease
interest
rates
very
much
.

Mr.
Rogers
wo
n't
decide
what
to
do
today
until
he
sees
how
the
London
and
Tokyo
markets
go
.

He
recommends
that
investors
sell
takeover-related
stocks
,
but
hang
on
to
some
other
stocks
--
especially
utilities
,
which
often
do
well
during
periods
of
economic
weakness
.

Frank
Curzio
.

Many
people
now
claim
to
have
predicted
the
1987
crash
.

Queens
newsletter
writer
Francis
X.
Curzio
actually
did
it
:
He
stated
in
writing
in
September
1987
that
the
Dow
Jones
Industrial
Average
was
likely
to
decline
about
500
points
the
following
month
.

Mr.
Curzio
says
what
happens
now
will
depend
a
good
deal
on
the
Federal
Reserve
Board
.

If
it
promptly
cuts
the
discount
rate
it
charges
on
loans
to
banks
,
he
says
,
``
That
could
quiet
things
down
.
''

If
not
,
``
We
could
go
to
2200
very
soon
.
''

Frank
W.
Terrizzi
.

Stock
prices
``
would
still
have
to
go
down
some
additional
amount
before
we
become
positive
on
stocks
,
''
says
Mr.
Terrizzi
,
president
and
managing
director
of
Renaissance
Investment
Management
Inc.
in
Cincinnati
.

Renaissance
,
which
manages
about
$
1.8
billion
,
drew
stiff
criticism
from
many
clients
earlier
this
year
because
it
pulled
entirely
out
of
stocks
at
the
beginning
of
the
year
and
thus
missed
a
strong
rally
.

Renaissance
is
keeping
its
money
entirely
in
cash
equivalents
,
primarily
U.S.
Treasury
bills
.

``
T-bills
probably
are
the
right
place
to
be
,
''
he
says
.

Regarding
the
Oct.
3
letter
to
the
editor
from
Rep.
Tom
Lantos
,
chairman
of
the
House
Subcommittee
on
Employment
and
Housing
,
alleging
:

1
.
That
your
Sept.
28
editorial
``
Kangaroo
Committees
''
was
factually
inaccurate
and
deliberately
misleading
.

I
thought
your
editorial
was
factually
accurate
and
deliberately
elucidative
.

2
.
That
Mr.
Lantos
supported
the
rights
of
the
witnesses
to
take
the
Fifth
Amendment
.

Yes
,
he
did
.

As
I
watched
him
on
C-Span
,
I
heard
him
speak
those
lovely
words
about
the
Bill
of
Rights
,
which
he
quotes
from
the
transcript
of
the
hearings
.

He
did
repeat
those
nice
platitudes
several
times
as
an
indication
of
his
support
for
the
Constitution
.

He
used
about
56
words
defending
the
witnesses
'
constitutional
rights
.

Unfortunately
,
by
my
rough
guess
,
he
used
better
than
5,000
words
heaping
scorn
on
the
witnesses
for
exercising
the
Fifth
.

He
sandwiched
his
praise
of
constitutional
meat
between
large
loaves
of
bilious
commentary
.

As
your
editorial
rightly
pointed
out
,
Samuel
Pierce
,
former
HUD
secretary
,
and
Lance
Wilson
,
Mr.
Pierce
's
former
aide
,
``
are
currently
being
held
up
to
scorn
for
taking
the
Fifth
Amendment
.

''
That
certainly
is
not
the
supposed
``
distorted
reading
''
indicated
by
Mr.
Lantos
.

3
.
That
his
``
committee
does
not
deal
with
any
possible
criminal
activity
at
HUD
.

My
colleagues
and
I
fully
realize
we
are
not
a
court
...
etc
.
''

Absolute
rubbish
.

By
any
``
reasonable
man
''
criterion
,
Mr.
Lantos
and
his
colleagues
have
a
whole
bunch
of
people
tried
and
convicted
.

Apparently
,
their
verdict
is
in
.

Right
now
they
're
pursuing
evidence
.

That
's
not
a
bad
way
to
proceed
,
just
somewhat
different
from
standard
American
practice
.

How
was
that
practice
referred
to
when
I
was
in
school
?

Ah
,
yes
,
something
called
a
Star
Chamber
.

Of
course
,
Mr.
Lantos
doth
protest
that
his
subcommittee
simply
seeks
information
for
legislative
change
.

No
doubt
that
's
partially
true
.

Everything
that
Mr.
Lantos
says
in
his
letter
is
partially
true
.

He
's
right
about
his
subcommittee
's
responsibilities
when
it
comes
to
obtaining
information
from
prior
HUD
officials
.

But
if
his
explanation
of
motivation
is
true
,
why
is
his
investigation
so
oriented
as
to
identify
criminal
activity
?

Why
not
simply
questions
designed
to
identify
sources
and
causes
of
waste
and
inefficiency
?

Such
as
,
what
happened
when
Congress
wanted
to
know
about
$
400
toilet
seats
or
whatever
they
supposedly
cost
?

No
,
Mr.
Lantos
's
complaints
simply
wo
n't
wash
.

4
.
That
the
Journal
defends
``
the
sleaze
,
fraud
,
waste
,
embezzlement
,
influence-peddling
and
abuse
of
the
public
that
took
place
while
Mr.
Pierce
was
secretary
of
HUD
,
''
etc.
and
so
forth
.

No
,
to
my
mind
,
the
Journal
did
not
``
defend
sleaze
,
fraud
,
waste
,
embezzlement
,
influence-peddling
and
abuse
of
the
public
trust
...
''

it
defended
appropriate
constitutional
safeguards
and
practical
common
sense
.

The
problem
,
which
the
Journal
so
rightly
pointed
out
in
a
number
of
articles
,
is
not
the
likes
of
Mr.
Lantos
,
who
after
all
is
really
a
bit
player
on
the
stage
,
but
the
attempt
by
Congress
to
enhance
itself
into
a
quasi-parliamentary\/judicial
body
.

(
Of
course
,
we
've
also
got
a
judiciary
that
seeks
the
same
objective
.
)

The
system
is
the
problem
,
not
an
individual
member
.

Individuals
can
always
have
their
hands
slapped
.

It
's
when
such
slapping
does
n't
occur
that
we
've
got
trouble
.

I
do
not
by
any
means
defend
HUD
management
.

But
I
think
the
kind
of
congressional
investigation
that
has
been
pursued
is
a
far
greater
danger
to
American
notions
of
liberty
and
freedom
than
any
incompetency
(
and
,
yes
,
maybe
criminality
)
within
HUD
could
possibly
generate
.

The
last
time
I
saw
a
similar
congressional
hearing
was
when
``
Tail
Gunner
Joe
''
McCarthy
did
his
work
.

Raymond
Weber

Parsippany
,
N.J
.

I
disagree
with
the
statement
by
Mr.
Lantos
that
one
should
not
draw
an
adverse
inference
against
former
HUD
officials
who
assert
their
Fifth
Amendment
privilege
against
self-incrimination
in
congressional
hearings
.

The
Fifth
Amendment
states
in
relevant
part
that
no
person
``
shall
be
compelled
,
in
any
criminal
case
,
to
be
a
witness
against
himself
.
''

This
privilege
against
self-incrimination
precludes
the
drawing
of
an
adverse
inference
against
a
criminal
defendant
who
chooses
not
to
testify
.

Thus
,
in
a
criminal
case
,
a
prosecutor
can
not
comment
on
a
defendant
's
failure
to
testify
nor
can
the
defendant
be
compelled
to
take
the
stand
as
a
witness
,
thus
forcing
him
to
``
take
the
Fifth
.
''

The
privilege
,
however
,
has
been
limited
in
accordance
with
its
plain
language
to
protect
the
defendant
in
criminal
matters
only
.

The
Supreme
Court
and
some
states
have
specifically
recognized
that
``
the
Fifth
Amendment
does
not
preclude
the
inference
where
the
privilege
is
claimed
by
a
party
to
a
civil
cause
.
''

Baxter
v.
Palmingiano
,
425
U.S.
308
(
1976
)
.

Thus
,
in
a
civil
case
,
a
defendant
may
be
called
as
a
witness
,
he
may
be
forced
to
testify
or
take
the
Fifth
,
and
his
taking
of
the
Fifth
may
permit
the
drawing
of
an
adverse
inference
against
him
in
the
civil
matter
.

He
may
take
the
Fifth
in
a
civil
matter
only
if
he
has
a
good
faith
and
justifiable
belief
that
his
testimony
may
subject
him
to
criminal
prosecution
.

Allowing
the
defendant
to
take
the
Fifth
in
a
civil
matter
is
not
based
on
a
constitutional
right
to
refuse
to
testify
where
one
's
testimony
harms
him
in
the
civil
matter
,
but
because
the
testimony
in
the
civil
matter
could
be
unconstitutionally
used
against
him
in
a
subsequent
criminal
prosecution
.

Absent
the
risk
of
such
prosecution
,
a
court
may
order
the
defendant
to
testify
.

Thus
,
when
Mr.
Pierce
asserted
the
Fifth
in
a
noncriminal
proceeding
,
particularly
after
presumably
receiving
extensive
advice
from
legal
counsel
,
one
must
conclude
that
he
held
a
good-faith
,
justifiable
belief
that
his
testimony
could
be
used
against
him
in
a
subsequent
criminal
prosecution
.

The
subcommittee
,
Congress
and
the
American
public
have
every
right
to
draw
the
adverse
inference
and
to
concur
with
Mr.
Pierce
's
own
belief
that
his
testimony
could
help
convict
him
of
a
crime
.

Drawing
the
adverse
inference
in
a
noncriminal
congressional
hearing
does
not
offend
the
Fifth
Amendment
shield
against
self-incrimination
.

Clark
S.
Spalsbury
Jr
.

Estes
Park
,
Colo
.

It
was
Friday
the
13th
,
and
the
stock
market
plummeted
nearly
200
points
.

Just
a
coincidence
?

Or
is
triskaidekaphobia
--
fear
of
the
number
13
--
justified
?

In
academia
,
a
so-called
Friday
the
13th
effect
has
been
set
up
and
shot
down
by
different
professors
.

Robert
Kolb
and
Ricardo
Rodriguez
,
professors
of
finance
at
the
University
of
Miami
,
found
evidence
that
the
market
is
spooked
by
Friday
the
13th
.

But
their
study
,
which
spanned
the
1962-85
period
,
has
since
been
shown
to
be
jinxed
by
an
unlucky
choice
of
data
.

In
the
'70s
,
the
market
took
falls
nine
times
in
a
row
on
Friday
the
you-know-what
.

But
the
date
tends
to
be
a
plus
,
not
a
minus
,
for
stocks
,
according
to
Yale
Hirsch
,
a
collector
of
stock
market
lore
.

Another
study
found
that
the
82
Fridays
the
13th
in
the
1940-1987
period
had
higher
than
average
returns
--
higher
even
than
Fridays
in
general
,
which
tend
to
be
strong
days
for
stock
prices
.

On
the
only
other
Friday
the
13th
this
year
,
the
Dow
Jones
Industrial
Average
rose
about
four
points
.

Professor
Kolb
says
the
original
study
,
titled
Friday
the
13th
,
Part
VII
,
was
published
tongue-in-cheek
.

In
a
similar
vein
,
he
adds
that
the
anniversary
of
the
1987
crash
and
Saturday
's
full
moon
could
have
played
a
part
,
too
,
in
Friday
's
market
activity
.

reminiscent
of
those
during
the
1987
crash
--
that
as
stock
prices
plummeted
and
trading
activity
escalated
,
some
phone
calls
to
market
makers
in
over-the-counter
stocks
went
unanswered
.

``
We
could
n't
get
dealers
to
answer
their
phones
,
''
said
Robert
King
,
senior
vice
president
of
OTC
trading
at
Robinson-Humphrey
Co.
in
Atlanta
.

``
It
was
{
like
}
the
Friday
before
Black
Monday
''
two
years
ago
.

Whether
unanswered
phone
calls
had
any
effect
or
not
,
Nasdaq
stocks
sank
far
less
than
those
on
the
New
York
and
American
exchanges
.

Nonetheless
,
the
Nasdaq
Composite
Index
suffered
its
biggest
point
decline
of
the
year
and
its
sixth
worst
ever
,
diving
14.90
,
or
3
%
,
to
467.29
.

Ten
points
of
the
drop
occurred
during
the
last
45
minutes
of
trading
.

By
comparison
,
the
New
York
Stock
Exchange
Composite
tumbled
5.8
%
Friday
and
the
American
Stock
Exchange
Composite
fell
4
%
.

On
Oct.
16
,
1987
,
the
Nasdaq
Composite
fell
16.18
points
,
or
3.8
%
,
followed
by
its
devastating
46.12-point
,
or
11
%
slide
,
three
days
later
.

Nasdaq
volume
Friday
totaled
167.7
million
shares
,
which
was
only
the
fifth
busiest
day
so
far
this
year
.

The
single-day
record
of
288
million
shares
was
set
on
Oct.
21
,

``
There
was
n't
a
lot
of
volume
because
it
was
just
impossible
to
get
stock
moved
,
''
said
E.E.
``
Buzzy
''
Geduld
,
president
of
Herzog
,
Heine
,
Geduld
,
a
New
York
company
that
makes
markets
in
thousands
of
OTC
issues
.

Most
of
the
complaints
about
unanswered
phone
calls
came
from
regional
brokers
rather
than
individual
investors
.

Mr.
King
of
Robinson-Humphrey
and
others
were
quick
to
add
that
they
believe
the
problem
stemmed
more
from
traders
'
inability
to
handle
the
volume
of
calls
,
rather
than
a
deliberate
attempt
to
avoid
making
trades
.

The
subject
is
a
sore
one
for
Nasdaq
and
its
market-making
companies
,
which
were
widely
criticized
two
years
ago
following
complaints
from
investors
who
could
n't
reach
their
brokers
or
trade
in
the
chaos
of
the
crash
.

Peter
DaPuzzo
,
head
of
retail
equity
trading
at
Shearson
Lehman
Hutton
,
declared
:
``
It
was
the
last
hour
of
trading
on
a
Friday
.

There
were
too
many
phones
ringing
and
too
many
things
happening
to
expect
market
makers
to
be
as
efficient
as
robots
.

It
was
n't
intentional
,
we
were
all
busy
.
''

James
Tarantino
,
head
of
OTC
trading
at
Hambrecht
&
Quist
in
San
Francisco
,
said
,
``
It
was
just
like
two
years
ago
.

Everybody
was
trying
to
do
the
same
thing
at
the
same
time
.
''

Jeremiah
Mullins
,
the
OTC
trading
chief
at
Dean
Witter
Reynolds
in
New
York
,
said
proudly
that
his
company
executed
every
order
it
received
by
the
close
of
trading
.

But
,
he
added
,
``
you
can
only
take
one
call
at
a
time
.
''

Market
makers
keep
supplies
of
stock
on
hand
to
maintain
orderly
trading
when
imbalances
occur
.

On
days
like
Friday
,
that
means
they
must
buy
shares
from
sellers
when
no
one
else
is
willing
to
.

When
selling
is
so
frenzied
,
prices
fall
steeply
and
fast
.

Two
years
ago
,
faced
with
the
possibility
of
heavy
losses
on
the
stocks
in
their
inventories
,
market
makers
themselves
began
dumping
shares
,
exacerbating
the
slide
in
OTC
stock
prices
.

On
Friday
,
some
market
makers
were
selling
again
,
traders
said
.

But
,
with
profits
sagging
on
Wall
Street
since
the
crash
,
companies
have
kept
smaller
share
stockpiles
on
hand
.

Mr.
Tarantino
of
Hambrecht
&
Quist
said
some
prices
fell
without
trades
taking
place
,
as
market
makers
kept
dropping
the
prices
at
which
they
would
buy
shares
.

``
Everyone
was
hitting
everyone
else
's
bid
,
''
he
said
.

So
,
while
OTC
companies
incurred
losses
on
Friday
,
trading
officials
said
the
damage
was
n't
as
bad
as
it
was
in
1987
.

``
Two
years
ago
we
were
carrying
huge
inventories
and
that
was
the
big
culprit
.

I
do
n't
know
of
anyone
carrying
big
inventories
now
,
''
said
Mr.
King
of
Robinson-Humphrey
.

Tony
Cecin
,
head
of
equity
trading
at
Piper
,
Jaffray
&
Hopwood
in
Minneapolis
,
said
that
Piper
Jaffray
actually
made
money
on
Friday
.

It
helped
that
his
inventory
is
a
third
smaller
now
than
it
was
two
years
ago
,
he
said
.

Joseph
Hardiman
,
president
of
the
National
Association
of
Securities
Dealers
,
which
oversees
the
Nasdaq
computerized
trading
system
,
said
that
despite
the
rush
of
selling
,
he
never
considered
the
situation
an
``
emergency
.
''

``
The
pace
of
trading
was
orderly
,
''
he
said
.

Nasdaq
's
Small
Order
Execution
System
``
worked
beautifully
,
''
as
did
the
automated
system
for
larger
trades
,
according
to
Mr.
Hardiman
.

Nevertheless
,
the
shock
of
another
steep
plunge
in
stock
prices
undoubtedly
will
shake
many
investors
'
confidence
.

In
the
past
,
the
OTC
market
thrived
on
a
firm
base
of
small-investor
participation
.

Because
Nasdaq
's
trading
volume
has
n't
returned
to
pre-crash
levels
,
traders
and
OTC
market
officials
hope
the
damage
wo
n't
be
permanent
.

But
they
are
worried
.

``
We
were
just
starting
to
get
the
public
's
confidence
back
,
''
lamented
Mr.
Mullins
of
Dean
Witter
.

More
troubling
is
the
prospect
that
the
overall
collapse
in
stock
prices
could
permanently
erode
the
base
of
small-investor
support
the
OTC
market
was
struggling
to
rebuild
in
the
wake
of
the
October
1987
crash
.

Mr.
Cecin
of
Piper
Jaffray
says
some
action
from
government
policy
makers
would
allay
investor
fears
.

It
wo
n't
take
much
more
to
``
scare
the
hell
out
of
retail
investors
,
''
he
says
.

The
sellers
on
Friday
came
from
all
corners
of
the
OTC
market
--
big
and
small
institutional
investors
,
as
well
as
individual
investors
and
market
makers
.

But
grateful
traders
said
the
sell
orders
generally
ranged
from
20,000
shares
to
50,000
shares
,
compared
with
blocks
of
500,000
shares
or
more
two
years
ago
.

Shearson
's
Mr.
DaPuzzo
said
retail
investors
nervously
sold
stock
Friday
and
never
returned
to
bargain-hunt
.

Institutional
investors
,
which
had
been
selling
stock
throughout
last
week
to
lock
in
handsome
gains
made
through
the
third
quarter
,
were
calmer
.

``
We
had
a
good
amount
of
selling
from
institutions
,
but
not
as
much
panic
,
''
Mr.
DaPuzzo
said
.

``
If
they
could
n't
sell
,
some
of
them
put
the
shares
back
on
the
shelf
.
''

In
addition
,
he
said
,
some
bigger
institutional
investors
placed
bids
to
buy
some
OTC
stocks
whose
prices
were
beaten
down
.

In
addition
,
Mr.
DaPuzzo
said
computer-guided
program
selling
of
OTC
stocks
in
the
Russell
Index
of
2000
small
stocks
and
the
Standard
&
Poor
's
500-stock
Index
sent
occasional
``
waves
``
through
the
market
.

Nasdaq
's
biggest
stocks
were
hammered
.

The
Nasdaq
100
Index
of
the
largest
nonfinancial
issues
,
including
the
big
OTC
technology
issues
,
tumbled
4.2
%
,
or
19.76
,
to
449.33
.

The
Nasdaq
Financial
Index
of
giant
insurance
and
banking
stocks
dropped
2
%
,
or
9.31
,
to
462.98
.

The
OTC
market
has
only
a
handful
of
takeover-related
stocks
.

But
they
fell
sharply
.

McCaw
Cellular
Communications
,
for
instance
,
has
offered
to
buy
LIN
Broadcasting
as
well
as
Metromedia
's
New
York
City
cellular
telephone
interests
,
and
in
a
separate
transaction
,
sell
certain
McCaw
properties
to
Contel
Cellular
.

McCaw
lost
8
%
,
or
3
1\/2
,
to
40
.

LIN
Broadcasting
,
dropped
5
1\/2
,
or
5
%
,
to
107
1\/2
.

The
turnover
in
both
issues
was
roughly
normal
.

On
a
day
when
negative
takeover-related
news
did
n't
sit
well
with
investors
,
Commercial
Intertech
,
a
maker
of
engineered
metal
parts
,
said
Haas
&
Partners
advised
it
that
it
does
n't
plan
to
pursue
its
previously
reported
$
27.50-a-share
bid
to
buy
the
company
.

Commercial
Intertech
plummeted
6
to
26
.

The
issues
of
companies
with
ties
to
the
junk
bond
market
also
tumbled
Friday
.

On
the
OTC
market
,
First
Executive
,
a
big
buyer
of
the
high-risk
,
high-yield
issues
,
slid
2
to
12
1\/4
.

Among
other
OTC
issues
,
Intel
,
dropped
2
1\/8
to
33
7\/8
;
Laidlaw
Transportation
lost
1
1\/8
to
19
1\/2
;
the
American
depositary
receipts
of
Jaguar
were
off
1\/4
to
10
1\/4
;
MCI
Communications
slipped
2
1\/4
to
43
1\/2
;
Apple
Computer
fell
3
to
45
3\/4
and
Nike
dropped
2
1\/4
to
66
3\/4
.

Friday
,
October
13
,
1989

The
key
U.S.
and
foreign
annual
interest
rates
below
are
a
guide
to
general
levels
but
do
n't
always
represent
actual
transactions
.

PRIME
RATE
:

10
1\/2
%
.

The
base
rate
on
corporate
loans
at
large
U.S.
money
center
commercial
banks
.

FEDERAL
FUNDS
:

8
13\/16
%
high
,
8
1\/2
%
low
,
8
5\/8
%
near
closing
bid
,
8
3\/4
%
offered
.

Reserves
traded
among
commercial
banks
for
overnight
use
in
amounts
of
$
1
million
or
more
.

Source
:
Fulton
Prebon
(
U.S.A
.
)
Inc
.

DISCOUNT
RATE
:

7
%
.

The
charge
on
loans
to
depository
institutions
by
the
New
York
Federal
Reserve
Bank
.

CALL
MONEY
:

9
3\/4
%
to
10
%
.

The
charge
on
loans
to
brokers
on
stock
exchange
collateral
.

COMMERCIAL
PAPER
placed
directly
by
General
Motors
Acceptance
Corp.
:

8.60
%
30
to
44
days
;
8.55
%
45
to
59
days
;
8.375
%
60
to
79
days
;
8.50
%
80
to
89
days
;
8.25
%
90
to
119
days
;
8.125
%
120
to
149
days
;
8
%
150
to
179
days
;
7.625
%
180
to
270
days
.

COMMERCIAL
PAPER
:

High-grade
unsecured
notes
sold
through
dealers
by
major
corporations
in
multiples
of
$
1,000
:

8.65
%
30
days
;
8.55
%
60
days
;
8.55
%
90
days
.

CERTIFICATES
OF
DEPOSIT
:

8.15
%
one
month
;
8.15
%
two
months
;
8.13
%
three
months
;
8.11
%
six
months
;
8.08
%
one
year
.

Average
of
top
rates
paid
by
major
New
York
banks
on
primary
new
issues
of
negotiable
C.D.s
,
usually
on
amounts
of
$
1
million
and
more
.

The
minimum
unit
is
$
100,000
.

Typical
rates
in
the
secondary
market
:

8.65
%
one
month
;
8.65
%
three
months
;
8.55
%
six
months
.

BANKERS
ACCEPTANCES
:

8.52
%
30
days
;
8.37
%
60
days
;
8.15
%
90
days
;
7.98
%
120
days
;
7.92
%
150
days
;
7.80
%
180
days
.

Negotiable
,
bank-backed
business
credit
instruments
typically
financing
an
import
order
.

LONDON
LATE
EURODOLLARS
:

8
13\/16
%
to
8
11\/16
%
one
month
;
8
13\/16
%
to
8
11\/16
%
two
months
;
8
13\/16
%
to
8
11\/16
%
three
months
;
8
3\/4
%
to
8
5\/8
%
four
months
;
8
11\/16
%
to
8
9\/16
%
five
months
;
8
5\/8
%
to
8
1\/2
%
six
months
.

LONDON
INTERBANK
OFFERED
RATES
(
LIBOR
)
:

8
3\/4
%
one
month
;
8
3\/4
%
three
months
;
8
9\/16
%
six
months
;
8
9\/16
%
one
year
.

The
average
of
interbank
offered
rates
for
dollar
deposits
in
the
London
market
based
on
quotations
at
five
major
banks
.

FOREIGN
PRIME
RATES
:

Canada
13.50
%
;
Germany
8.50
%
;
Japan
4.875
%
;
Switzerland
8.50
%
;
Britain
15
%
.

These
rate
indications
are
n't
directly
comparable
;
lending
practices
vary
widely
by
location
.

TREASURY
BILLS
:

Results
of
the
Tuesday
,
October
10
,
1989
,
auction
of
short-term
U.S.
government
bills
,
sold
at
a
discount
from
face
value
in
units
of
$
10,000
to
$
1
million
:

7.63
%
13
weeks
;
7.60
%
26
weeks
.

FEDERAL
HOME
LOAN
MORTGAGE
CORP
.
(
Freddie
Mac
)
:

Posted
yields
on
30-year
mortgage
commitments
for
delivery
within
30
days
.

9.91
%
,
standard
conventional
fixedrate
mortgages
;
7.875
%
,
2
%
rate
capped
one-year
adjustable
rate
mortgages
.

Source
:
Telerate
Systems
Inc
.

FEDERAL
NATIONAL
MORTGAGE
ASSOCIATION
(
Fannie
Mae
)
:

Posted
yields
on
30
year
mortgage
commitments
for
delivery
within
30
days
(
priced
at
par
)

9.86
%
,
standard
conventional
fixed-rate
mortgages
;
8.85
%
,
6\/2
rate
capped
one-year
adjustable
rate
mortgages
.

Source
:
Telerate
Systems
Inc
.

MERRILL
LYNCH
READY
ASSETS
TRUST
:

8.33
%
.

Annualized
average
rate
of
return
after
expenses
for
the
past
30
days
;
not
a
forecast
of
future
returns
.

Pension
funds
,
insurers
and
other
behemoths
of
the
investing
world
said
they
began
scooping
up
stocks
during
Friday
's
market
rout
.

And
they
plan
to
buy
more
today
.

Rightly
or
wrongly
,
many
giant
institutional
investors
appear
to
be
fighting
the
latest
war
by
applying
the
lesson
they
learned
in
the
October
1987
crash
:
Buying
at
the
bottom
pays
off
.

To
be
sure
,
big
investors
might
put
away
their
checkbooks
in
a
hurry
if
stocks
open
sharply
lower
today
.

They
could
still
panic
and
bail
out
of
the
market
.

But
their
1987
performance
indicates
that
they
wo
n't
abandon
stocks
unless
conditions
get
far
worse
.

``
Last
time
,
we
got
rewarded
for
going
out
and
buying
stocks
when
the
panic
was
the
worst
,
''
said
John
W.
Rogers
,
president
of
Chicago-based
Ariel
Capital
Management
Inc.
,
which
manages
$
1.1
billion
of
stocks
.

Mr.
Rogers
spent
half
his
cash
on
hand
Friday
for
``
our
favorite
stocks
that
have
fallen
apart
.
''

He
expects
to
invest
the
rest
if
the
market
weakens
further
.

Denver-based
portfolio
manager
James
Craig
was
n't
daunted
when
Friday
's
rout
shaved
$
40
million
from
the
value
of
the
$
752
million
Janus
Fund
he
oversees
.

``
I
waited
to
make
sure
all
the
program
trades
had
kicked
through
,
''
he
said
.

Then
he
jumped
into
the
market
:

``
I
spent
$
30
million
in
the
last
half-hour
.
''

Other
money
managers
also
opened
their
wallets
.

``
I
was
buying
at
the
close
(
Friday
)
and
I
'll
be
buying
again
because
I
know
we
're
getting
good
value
,
''
said
Frederick
A.
Moran
,
president
of
Moran
Asset
Management
Inc.
,
Greenwich
,
Conn
.

``
There
is
no
justification
on
the
fundamental
level
for
this
crash
.
''

Unlike
mutual
funds
,
which
can
be
forced
to
sell
stockholdings
when
investors
rush
to
withdraw
money
,
big
investors
such
as
pension
funds
and
insurance
companies
can
decide
to
ride
out
market
storms
without
jettisoning
stock
.

Most
often
,
they
do
just
that
,
because
stocks
have
proved
to
be
the
best-performing
long-term
investment
,
attracting
about
$
1
trillion
from
pension
funds
alone
.

``
If
you
bought
after
the
crash
,
you
did
very
very
well
off
the
bottom
,
''
said
Stephen
B.
Timbers
,
chief
investment
officer
of
Chicago-based
Kemper
Financial
Services
Inc
.

The
$
56
billion
California
Public
Employees
Retirement
System
,
for
one
,
added
$
1
billion
to
its
stock
portfolio
two
years
ago
.

``
The
last
crash
taught
institutional
investors
that
they
have
to
be
long-term
holders
,
and
that
they
ca
n't
react
to
short-term
events
,
good
or
bad
,
''
said
Stephen
L.
Nesbitt
,
senior
vice
president
for
the
pension
consultants
Wilshire
Associates
in
Santa
Monica
,
Calif
.

``
Those
that
pulled
out
(
of
stocks
)
regretted
it
,
''
he
said
,
``
so
I
doubt
you
'll
see
any
significant
changes
''
in
institutional
portfolios
as
a
result
of
Friday
's
decline
.

Stocks
,
as
measured
by
the
Standard
&
Poor
's
500-stock
index
,
have
been
stellar
performers
this
year
,
rising
27.97
%
before
Friday
's
plunge
,
excluding
dividends
.

Even
Friday
's
slump
leaves
investors
ahead
more
than
20
%
,
well
above
the
annual
average
for
stocks
over
several
decades
.

``
You
could
go
down
400
points
and
still
have
a
good
year
in
the
market
,
''
said
James
D.
Awad
,
president
of
New
York-based
BMI
Capital
Corp
.

Mr.
Awad
,
however
,
worries
that
the
market
``
could
go
down
800
or
900
points
in
the
next
few
days
.

It
can
happen
before
you
can
turn
around
.
''

He
said
he
discerns
many
parallels
with
1987
,
including
the
emphasis
on
takeover
stocks
and
the
re-emergence
of
computerized
program
trading
.

``
The
only
thing
you
do
n't
have
,
''
he
said
,
``
is
the
`
portfolio
insurance
'
phenomenon
overlaid
on
the
rest
.
''

Most
institutional
investors
have
abandoned
the
portfolio
insurance
hedging
technique
,
which
is
widely
thought
to
have
worsened
the
1987
crash
.

Not
really
insurance
,
this
tactic
was
designed
to
soften
the
blow
of
declining
stock
prices
and
generate
an
offsetting
profit
by
selling
waves
of
S&P
futures
contracts
.

In
its
severest
test
,
the
$
60
billion
of
portfolio
insurance
in
effect
in
the
1987
crash
did
n't
work
,
as
stock
buyers
disappeared
and
stock
and
futures
prices
became
disconnected
.

Even
without
portfolio
insurance
,
market
conditions
were
grim
Friday
,
money
managers
said
.

Neil
Weisman
,
whose
New
York-based
Chilmark
Capital
Partners
had
converted
85
%
of
its
$
220
million
investment
pool
to
cash
in
recent
months
,
said
he
was
besieged
by
Wall
Street
firms
Friday
asking
him
to
take
stock
off
their
hands
.

``
We
got
calls
from
big
block
houses
asking
us
if
we
want
to
make
bids
on
anything
,
''
said
Mr.
Weisman
,
who
,
happy
with
his
returns
on
investments
chalked
up
earlier
,
declined
the
offers
.

Mr.
Weisman
predicts
stocks
will
appear
to
stabilize
in
the
next
few
days
before
declining
again
,
trapping
more
investors
.

``
I
think
it
will
be
a
rigor
mortis
rally
,
''
he
said
.

Meanwhile
,
Friday
brought
a
reprieve
for
money
managers
whose
investment
styles
had
put
them
at
odds
with
the
market
rally
.

Especially
gleeful
were
the
short
sellers
,
who
have
been
pounded
by
this
year
's
market
climb
.

The
shorts
sell
borrowed
shares
,
hoping
to
profit
by
replacing
them
later
at
a
lower
price
.

The
nation
's
largest
short-selling
operation
is
Feshbach
Brothers
,
Palo
Alto
,
Calif.
,
which
said
last
May
that
its
short
positions
had
shown
losses
of
10
%
for
the
year
up
to
that
point
.

All
that
now
has
changed
.

``
We
're
ahead
for
the
year
because
of
Friday
,
''
said
the
firm
's
Kurt
Feshbach
.

``
We
're
not
making
a
killing
,
but
we
had
a
good
day
.

Food
and
Drug
Administration
spokesman
Jeff
Nesbit
said
the
agency
has
turned
over
evidence
in
a
criminal
investigation
concerning
Vitarine
Pharmaceuticals
Inc.
to
the
U.S.
Attorney
's
office
in
Baltimore
.

Neither
Vitarine
nor
any
of
the
Springfield
Gardens
,
N.Y.
,
company
's
officials
or
employees
have
been
charged
with
any
crimes
.

Vitarine
won
approval
to
market
a
version
of
a
blood
pressure
medicine
but
acknowledged
that
it
substituted
a
SmithKline
Beecham
PLC
product
as
its
own
in
tests
.

Mr.
Nesbit
also
said
the
FDA
has
asked
Bolar
Pharmaceutical
Co.
to
recall
at
the
retail
level
its
urinary
tract
antibiotic
.

But
so
far
the
company
has
n't
complied
with
that
request
,
the
spokesman
said
.

Bolar
,
the
subject
of
a
criminal
investigation
by
the
FDA
and
the
Inspector
General
's
office
of
the
Health
and
Human
Services
Department
,
only
agreed
to
recall
two
strengths
of
its
version
of
Macrodantin
``
as
far
down
as
direct
customers
,
mostly
wholesalers
,
''
Mr.
Nesbit
said
.

Bolar
,
of
Copiague
,
N.Y.
,
earlier
began
a
voluntary
recall
of
both
its
100
milligram
and
50
milligram
versions
of
the
drug
.

The
FDA
has
said
it
presented
evidence
it
uncovered
to
the
company
indicating
that
Bolar
substituted
the
brand-name
product
for
its
own
to
gain
government
approval
to
sell
generic
versions
of
Macrodantin
.

Bolar
has
denied
that
it
switched
the
brand-name
product
for
its
own
in
such
testing
.

The
West
German
retailer
ASKO
Deutsche
Kaufhaus
AG
plans
to
challenge
the
legality
of
a
widely
employed
anti-takeover
defense
of
companies
in
the
Netherlands
.

The
eventual
court
decision
could
become
a
landmark
in
Dutch
corporate
law
because
the
lawsuit
ASKO
plans
to
file
would
be
the
first
to
challenge
the
entire
principle
and
practice
of
companies
issuing
voting
preferred
shares
to
management-controlled
trusts
to
dilute
voting
power
of
common
stockholders
.

Up
to
now
only
specific
aspects
of
these
defenses
have
been
challenged
,
though
unsuccessfully
,
ASKO
's
Dutch
lawyers
noted
.

Should
the
courts
uphold
the
validity
of
this
type
of
defense
,
ASKO
will
then
ask
the
court
to
overturn
such
a
vote-diluting
maneuver
recently
deployed
by
Koninklijke
Ahold
NV
.

ASKO
says
the
Dutch-based
international
food
retailer
had
n't
reasonable
grounds
to
issue
preferred
stock
to
a
friendly
trust
and
thus
dilute
the
worth
and
voting
power
of
ASKO
and
other
shareholders
.

Speaking
through
its
Dutch
lawyers
,
ASKO
also
disclosed
it
holds
a
15
%
stake
in
Ahold
.

It
was
previously
thought
ASKO
held
a
13.6
%
stake
that
was
accumulated
since
July
.

A
spokesman
for
Ahold
said
his
company
is
confident
of
its
own
position
and
the
propriety
of
the
preferred-share
issue
.

He
termed
ASKO
's
legal
actions
as
``
unproductive
''
to
international
cooperation
among
European
retailers
.

Chase
Manhattan
Bank
Chairman
Willard
Butcher
is
a
conservative
banker
and
a
loyal
Republican
,
but
on
Friday
morning
he
had
few
kind
words
for
President
Bush
's
economic
policy-making
.

``
There
are
some
very
significant
issues
out
there
,
such
as
the
fiscal
deficit
,
the
trade
deficit
,
our
relations
with
Japan
,
that
have
to
be
the
subject
of
major
initiatives
,
''
he
said
in
an
interview
.

``
I
'd
like
to
see
that
initiative
,
and
I
have
n't
.

There
is
n't
a
big
shot
,
an
agenda
.
''

A
few
hours
later
,
the
stock
market
dropped
190
points
.

Politicians
tried
to
finger
each
other
for
the
blame
,
although
many
analysts
doubt
that
Washington
was
singly
responsible
for
Wall
Street
's
woes
.

But
Mr.
Butcher
's
comments
make
one
thing
clear
:
Some
on
Wall
Street
wonder
if
anyone
is
in
charge
of
economic
policy
.

Consider
this
:

--
By
11:59
p.m.
tonight
,
President
Bush
must
order
$
16
billion
of
automatic
,
across-the-board
cuts
in
government
spending
to
comply
with
the
Gramm-Rudman
budget
law
.

The
cuts
are
necessary
because
Congress
and
the
administration
have
failed
to
reach
agreement
on
a
deficit-cutting
bill
.

``
We
simply
do
n't
have
strong
leadership
to
try
to
reduce
the
deficit
and
make
tough
choices
,
''
House
Budget
Committee
Chairman
Leon
Panetta
(
D.
,
Calif
.
)
said
yesterday
on
NBC
News
's
``
Meet
the
Press
.
''

--
For
the
last
two
weeks
,
the
Bush
administration
and
the
Federal
Reserve
have
been
engaged
in
a
semi-public
battle
over
international
economic
policy
.

The
administration
has
been
trying
to
push
the
dollar
lower
;
the
Fed
has
been
resisting
.

``
One
of
the
things
that
continues
to
worry
me
is
this
monetary
warfare
between
the
Treasury
Department
and
the
Federal
Reserve
Board
,
''
said
Lawrence
Kudlow
,
a
Bear
,
Stearns
&
Co.
economist
,
on
ABC
's
``
This
Week
.
''

--
The
administration
has
sent
out
confusing
signals
about
its
response
to
a
recent
spate
of
airline
takeovers
.

Last
month
,
Transportation
Secretary
Sam
Skinner
forced
Northwest
Airlines
to
reduce
a
stake
held
by
KLM
Royal
Dutch
Airlines
.

But
he
has
since
run
into
opposition
from
the
Treasury
and
the
White
House
over
that
decision
.

And
he
has
kept
mum
on
how
his
decision
might
affect
a
bid
for
United
Airlines
,
which
includes
a
big
stake
by
British
Airways
PLC
.

Some
analysts
say
uncertainty
about
Washington
's
anti-takeover
policy
was
one
reason
that
financing
for
the
United
Airlines
takeover
fell
through
--
the
event
that
triggered
the
market
drop
.

In
many
ways
,
the
backdrop
to
Friday
's
stock
decline
is
eerily
similar
to
that
of
October
1987
's
508-point
crash
.

Then
,
as
now
,
the
budget
debate
was
behind
schedule
and
automatic
spending
cuts
were
within
days
of
taking
hold
.

The
Treasury
was
locked
in
a
battle
over
international
economic
policy
,
although
at
that
time
it
was
with
West
German
officials
rather
than
the
Federal
Reserve
.

And
concern
about
official
actions
aimed
at
takeovers
--
then
by
the
tax-writing
House
Ways
and
Means
Committee
rather
than
the
Transportation
Department
--
were
making
markets
nervous
.

The
1987
crash
brought
the
Reagan
administration
and
Democratic
lawmakers
to
the
table
for
the
first
budget
summit
,
resulting
in
a
two-year
plan
to
reduce
the
deficit
by
more
than
$
76
billion
--
even
though
the
deficit
actually
rose
by
nearly
$
12
billion
during
that
period
.

But
,
barring
further
drops
in
the
market
this
week
,
a
similar
outcome
does
n't
seem
likely
this
year
.

Lawmakers
and
administration
officials
agree
that
Friday
's
drop
,
by
itself
,
is
n't
enough
to
force
both
sides
back
to
the
table
to
try
to
reach
a
deficit-reduction
agreement
that
would
be
more
serious
and
more
far-reaching
than
last
spring
's
gimmick-ridden
plan
,
which
still
is
n't
fully
implemented
.

One
of
the
biggest
reasons
that
new
talks
are
n't
likely
to
come
about
is
that
,
as
everyone
learned
in
1987
,
the
economy
and
the
market
can
survive
a
one-day
508-point
tumble
.

``
Everybody
thought
we
were
looking
at
a
repetition
of
1929
,
that
we
were
looking
at
a
recession
,
''
Rep.
Panetta
said
yesterday
in
an
interview
.

``
That
did
not
happen
.

They
learned
they
could
survive
it
without
much
problem
.
''

But
administration
officials
privately
agree
with
Mr.
Panetta
,
who
said
a
precipitous
drop
this
week
``
is
going
to
force
the
president
and
Congress
to
take
a
much
harder
look
at
fiscal
policy
.
''

In
that
case
,
there
will
be
plenty
of
blame
to
go
around
.

``
There
is
an
underlying
concern
on
the
part
of
the
American
people
--
and
there
should
be
-
that
the
administration
has
not
gone
far
enough
in
cutting
this
deficit
and
that
Congress
has
been
unwilling
to
cut
what
the
administration
asked
us
to
cut
,
''
said
Senate
Finance
Committee
Chairman
Lloyd
Bentsen
(
D.
,
Texas
)
.

Nevertheless
,
it
clearly
will
take
more
than
Friday
's
190-point
decline
to
overcome
the
bitter
feelings
that
have
developed
between
lawmakers
and
White
House
Budget
Director
Richard
Darman
over
the
capital-gains
fight
.

Hill
Democrats
are
particularly
angry
over
Mr.
Bush
's
claim
that
the
capital-gains
cut
was
part
of
April
's
budget
accord
and
his
insistence
on
combining
it
with
the
deficit-reduction
legislation
.

``
There
is
no
prospect
of
any
so-called
grand
compromise
or
deal
next
year
because
the
administration
simply
did
n't
live
up
to
this
year
's
deal
,
''
Senate
Majority
Leader
George
Mitchell
(
D.
,
Maine
)
said
yesterday
on
CBS
News
's
``
Face
the
Nation
.
''

During
last
week
's
maneuverings
on
the
deficit-cutting
bill
and
the
capital-gains
issue
,
there
were
signs
that
Senate
Republicans
and
the
administration
were
at
odds
.

At
the
very
moment
that
Senate
Republicans
were
negotiating
a
deal
to
exclude
capital
gains
from
the
deficit-reduction
legislation
,
White
House
spokesman
Marlin
Fitzwater
told
reporters
that
it
was
the
president
's
policy
to
include
it
.

When
an
agreement
was
reached
to
strip
capital
gains
from
the
legislation
,
Oregon
Sen.
Bob
Packwood
,
the
ranking
GOP
member
of
the
tax-writing
Senate
Finance
Committee
,
hailed
it
.

Asked
if
the
administration
agreed
,
he
curtly
replied
:
``
The
adminstration
will
have
to
speak
for
itself
.
''

Friday
's
market
tumble
could
spur
action
on
reconciling
the
House
and
Senate
versions
of
the
deficit-reduction
measure
,
a
process
that
is
n't
expected
to
begin
until
tomorrow
at
the
soonest
.

Senate
Republicans
expressed
the
hope
that
the
House
would
follow
the
lead
of
the
Senate
,
which
on
Friday
agreed
to
drop
a
variety
of
spending
measures
and
tax
breaks
that
would
have
increased
the
fiscal
1990
deficit
.

``
The
market
needs
a
strong
signal
that
we
're
serious
about
deficit
reduction
,
and
the
best
way
to
do
that
is
for
the
House
of
Representatives
to
strip
their
bill
''
of
similar
provisions
,
Sen.
Warren
Rudman
(
R.
,
N.H
.
)
.
said
yesterday
.

The
White
House
Office
of
Management
and
Budget
,
whose
calculations
determine
whether
the
Gramm-Rudman
targets
are
met
,
estimated
that
the
House-passed
deficit-reduction
measure
would
cut
the
fiscal
1990
shortfall
by
$
6.2
billion
,
almost
half
of
the
Congressional
Budget
Office
's
estimate
of
$
11.0
billion
.

Rep.
Panetta
said
that
OMB
's
figure
would
still
be
enough
to
avoid
permanent
across-the-board
cuts
,
but
added
:
``
We
're
getting
very
close
to
the
margins
here
.
''

No
one
in
Washington
was
willing
to
take
the
blame
for
provoking
Friday
's
drop
in
the
stock
market
.

But
some
players
were
quick
to
seize
the
moment
.

Before
the
sun
had
set
on
Friday
,
Richard
Rahn
,
the
supply-side
chief
economist
of
the
U.S.
Chamber
of
Commerce
,
issued
a
statement
attributing
the
drop
in
stock
prices
to
the
Senate
decision
to
postpone
action
on
capital
gains
.

``
Investors
,
who
had
been
holding
assets
in
anticipation
of
a
more
favorable
time
to
sell
,
were
spooked
,
''
he
said
.

``
There
have
been
many
preposterous
reasons
advanced
to
support
a
capital-gains
tax
cut
,
''
Sen.
Mitchell
said
during
his
television
appearance
,
``
but
I
suggest
that
is
perhaps
more
than
any
of
the
others
.

The
following
U.S.
Treasury
,
corporate
and
municipal
offerings
are
tentatively
scheduled
for
sale
this
week
,
according
to
Dow
Jones
Capital
Markets
Report
:

$
15.2
billion
of
three-month
and
six-month
bills
.

Two-year
notes
,
refinancing
about
$
9.6
billion
in
maturing
debt
.

$
9.75
billion
of
52-week
bills
.

Connecticut
Light
&
Power
Co.
--

Three
million
shares
of
$
25
preferred
,
via
competitive
bidding
.

B&H
Crude
Carriers
Ltd.
--

Four
million
common
shares
,
via
Salomon
Brothers
Inc
.

Baldwin
Technology
Co.
--

2.6
million
Class
A
shares
,
via
Smith
Barney
Harris
Upham
&
Co
.

Blockbuster
Entertainment
Corp.
--

$
250
million
(
face
amount
)
Liquid
Yield
Option
Notes
,
via
Merrill
Lynch
Capital
Markets
.

Chase
Manhattan
Corp.
--

14
million
common
shares
,
via
Goldman
,
Sachs
&
Co
.

Comcast
Corp.
--

$
150
million
convertible
debentures
,
via
Merrill
Lynch
.

CSS
Industries
--

1.3
million
common
shares
,
via
Merrill
Lynch
.

Eastern
Utilities
Associates
--

1.5
million
common
shares
,
via
PaineWebber
Inc
.

Employee
Benefit
Plans
Inc.
--

Two
million
common
shares
,
via
Dean
Witter
Capital
Markets
.

Exabyte
Corp.
--

2,850,000
common
shares
,
via
Goldman
Sachs
.

Knowledgeware
Inc.
--

2.4
million
common
shares
,
via
Montgomery
Securities
.

Oregon
--

$
100
million
of
general
obligation
veterans
'
tax
notes
,
Series
1989
,
via
competitive
bid
.

Washington
,
D.C.
--

$
200
million
of
1990
general
obligation
tax
revenue
notes
(
Series
1990A
)
,
via
competitive
bid
.

Virginia
Public
School
Authority
--

$
55,730,000
of
school
financing
bonds
,
1989
Series
B
(
1987
resolution
)
,
via
competitive
bid
.

Austin
,
Texas
--

$
68,230,000
of
various
bonds
,
including
$
32
million
hotel
occupancy
tax
revenue
bonds
,
Series
1989A
,
and
$
36.23
million
convention
center
revenue
bonds
,
Series
1989B
,
via
a
Morgan
Stanley
&
Co.
group
.

California
Health
Facilities
Financing
Authority
--

$
144.5
million
of
Kaiser
Permanente
revenue
bonds
,
via
a
PaineWebber
group
.

Connecticut
--

$
100
million
of
general
obligation
capital
appreciation
bonds
,
College
Savings
Plan
,
1989
Series
B
,
via
a
Prudential-Bache
Capital
Funding
group
.

Pennsylvania
Higher
Education
Facilities
Authority
--

$
117
million
of
revenue
bonds
for
Hahnemann
University
,
Series
1989
,
via
a
Merrill
Lynch
group
.

Tennessee
Valley
Authority
--

Three
billion
of
power
bonds
,
via
First
Boston
Corp
.

University
of
Medicine
And
Dentistry
of
New
Jersey
--

$
55
million
of
Series
C
bonds
,
via
a
Prudential-Bache
group
.

West
Virginia
Parkways
,
Economic
Development
And
Tourism
Authority
--

$
143
million
of
parkway
revenue
bonds
,
Series
1989
,
via
a
PaineWebber
group
.

San
Antonio
,
Texas
--

$
640
million
of
gas
and
electric
revenue
refunding
bonds
,
via
a
First
Boston
group
.

South
Dakota
Health
&
Education
Facility
Authority
--

$
51.1
million
of
Rapid
City
Regional
Hospital
bonds
,
via
a
Dougherty
,
Dawkins
,
Strand
&
Yost
Inc.
group
.

Small
investors
matched
their
big
institutional
brethren
in
anxiety
over
the
weekend
,
but
most
seemed
to
be
taking
a
philosophical
approach
and
said
they
were
resigned
to
riding
out
the
latest
storm
in
the
stock
market
.

``
I
'm
not
losing
faith
in
the
market
,
''
said
Boston
lawyer
Christopher
Sullivan
as
he
watched
the
market
plunge
on
a
big
screen
in
front
of
a
brokerage
firm
.

But
he
's
not
so
sure
about
everyone
else
.

``
I
think
on
Monday
the
small
(
investors
)
are
going
to
panic
and
sell
,
''
predicted
Mr.
Sullivan
,
whose
investments
include
AMR
Corp.
's
American
Airlines
unit
and
several
mutual
funds
.

``
And
I
think
institutions
are
going
to
come
in
and
buy
...

I
'm
going
to
hold
on
.

If
I
sell
now
,
I
'll
take
a
big
loss
.
''

Some
evinced
an
optimism
that
had
been
rewarded
when
they
did
n't
flee
the
market
in
1987
.

``
Oh
,
I
bet
it
'll
be
up
50
points
on
Monday
,
''
said
Lucy
Crump
,
a
78-year-old
retired
housewife
in
Lexington
,
Ky
.

Mrs.
Crump
said
her
Ashwood
Investment
Club
's
portfolio
lost
about
one-third
of
its
value
following
the
Black
Monday
crash
,
``
but
no
one
got
discouraged
,
and
we
gained
that
back
--
and
more
.
''

At
the
annual
congress
of
the
National
Association
of
Investors
Corp.
at
the
Hyatt
Regency
hotel
in
Minneapolis
,
the
scene
was
calm
.

Some
500
investors
representing
investor
clubs
from
around
the
U.S.
were
attending
when
the
market
started
to
slide
Friday
.

But
Robert
Showalter
,
an
official
of
the
association
,
said
no
special
bulletins
or
emergency
meetings
of
the
investors
'
clubs
are
planned
.

In
fact
,
some
of
the
association
's
members
--
long-term
,
buy-and-hold
investors
--
welcomed
the
drop
in
prices
.

``
We
hope
to
take
advantage
of
it
,
''
said
John
Snyder
,
a
member
of
a
Los
Angeles
investors
'
club
.

He
has
four
stocks
in
mind
to
buy
if
the
prices
drop
to
the
level
he
wants
.

Not
everyone
is
reacting
so
calmly
,
however
,
and
many
wonder
about
the
long-term
implications
of
what
is
widely
viewed
as
the
cause
of
Friday
's
slide
,
reluctance
by
banks
to
provide
financing
for
a
buy-out
of
UAL
Corp.
,
parent
of
United
Airlines
.

Marc
Perkins
,
a
Tampa
,
Fla.
,
investment
banker
,
said
the
market
drop
is
one
of
``
a
tremendous
number
of
signs
that
the
leveraged
take-out
era
is
ending
.

There
's
no
question
that
there
's
a
general
distaste
for
leverage
among
lenders
.

''
Mr.
Perkins
believes
,
however
,
that
the
market
could
be
stabilized
if
California
investor
Marvin
Davis
steps
back
in
to
the
United
bidding
with
an
offer
of
$
275
a
share
.

Sara
Albert
,
a
34-year-old
Dallas
law
student
,
says
she
's
generally
skittish
about
the
stock
market
and
the
takeover
activity
that
seems
to
fuel
it
.

``
I
have
this
feeling
that
it
's
built
on
sand
,
''
she
says
,
that
the
market
rises
``
but
there
's
no
foundation
to
it
.
''

She
and
her
husband
pulled
most
of
their
investments
out
of
the
market
after
the
1987
crash
,
although
she
still
owns
some
Texaco
stock
.

Partly
because
of
concern
about
the
economy
and
partly
because
she
recently
quit
her
job
as
a
legal
assistant
to
go
to
school
,
``
I
think
at
this
point
we
want
to
be
a
lot
more
liquid
.
''

Others
wonder
how
many
more
of
these
shocks
the
small
investor
can
stand
.

``
We
all
assumed
October
'87
was
a
one-time
shot
,
''
said
San
Francisco
attorney
David
Greenberg
.

``
We
told
the
little
guy
it
could
only
happen
once
in
a
lifetime
,
come
on
back
.

Now
it
's
happening
again
.
''

Mr.
Greenberg
got
out
just
before
the
1987
crash
and
,
to
his
regret
,
never
went
back
even
as
the
market
soared
.

This
time
he
's
ready
to
buy
in
``
when
the
panic
wears
off
.
''

Still
,
he
adds
:
``
We
ca
n't
have
this
kind
of
thing
happen
very
often
.

When
the
little
guy
gets
frightened
,
the
big
guys
hurt
badly
.

Merrill
Lynch
ca
n't
survive
without
the
little
guy
.
''

Small
investors
have
tiptoed
back
into
the
market
following
Black
Monday
,
but
mostly
through
mutual
funds
.

Discount
brokerage
customers
``
have
been
in
the
market
somewhat
but
not
whole
hog
like
they
were
two
years
ago
,
''
says
Leslie
Quick
Jr.
,
chairman
of
the
Quick
&
Reilly
discount
brokerage
firm
.

Hugo
Quackenbush
,
senior
vice
president
at
Charles
Scwhab
Corp.
,
says
Schwab
customers
``
have
been
neutral
to
cautious
recently
about
stocks
.
''

Individual
investors
are
still
angry
about
program
trading
,
Mr.
Quackenbush
says
.

Avner
Arbel
,
a
Cornell
University
finance
professor
,
says
government
regulators
will
have
to
more
closely
control
program
trading
to
``
win
back
the
confidence
of
the
small
investor
.
''

But
it
's
not
only
the
stock
market
that
has
some
small
investors
worried
.

Alan
Helfman
,
general
sales
manager
of
a
Chrysler
dealership
in
Houston
,
said
he
and
his
mother
have
some
joint
stock
investments
,
but
the
overall
economy
is
his
chief
worry
.

``
These
high
rollers
took
a
big
bath
today
,
''
he
said
in
his
showroom
,
which
is
within
a
few
miles
of
the
multi-million
dollar
homes
of
some
of
Houston
's
richest
citizens
.

``
And
I
can
tell
you
that
a
high
roller
is
n't
going
to
come
in
tomorrow
and
buy
a
Chrysler
TC
by
Maserati
.
''

And
,
finally
,
there
were
the
gloaters
.

``
I
got
out
in
1987
.

Everything
,
''
said
Pascal
Antori
,
an
Akron
,
Ohio
,
plumbing
contractor
who
was
visiting
Chicago
and
stopped
by
Fidelity
Investments
'
LaSalle
Street
office
.

``
I
just
stopped
by
to
see
how
much
I
would
have
lost
.
''

Would
Mr.
Antori
ever
get
back
in
?

``
Are
you
kidding
!

When
it
comes
to
money
:
Once
bitten
,
2,000
times
shy
.

The
crowded
field
for
notebook-sized
computers
is
about
to
become
a
lot
more
crowded
.

Compaq
Computer
Corp.
's
long-awaited
entry
today
into
the
notebook
field
is
expected
to
put
immediate
heat
on
others
in
the
market
,
especially
Zenith
Electronics
Corp.
,
the
current
market
leader
,
and
on
a
swarm
of
promising
start-ups
.

Compaq
's
series
of
notebooks
extends
a
trend
toward
downsizing
in
the
personal
computer
market
.

One
manufacturer
already
has
produced
a
clipboard-sized
computer
called
a
notepad
,
and
two
others
have
introduced
even
smaller
``
palmtops
.
''

But
those
machines
are
still
considered
novelties
,
with
keyboards
only
a
munchkin
could
love
and
screens
to
match
.

Compaq
's
notebooks
,
by
contrast
,
may
be
the
first
in
their
weight
class
not
to
skimp
on
features
found
in
much
bigger
machines
.

Analysts
say
they
're
faster
and
carry
more
memory
than
anything
else
of
their
size
on
the
market
--
and
they
're
priced
aggressively
at
$
2,400
to
$
5,000
.

All
of
this
comes
in
a
machine
that
weighs
only
six
pounds
and
fits
comfortably
into
most
briefcases
.

In
recent
months
,
Compaq
's
competition
,
including
Zenith
,
Toshiba
Corp.
,
Tandy
Corp.
and
NEC
Corp.
all
have
introduced
portables
that
weigh
approximately
the
same
and
that
are
called
notebooks
--
perhaps
misleadingly
.

One
analyst
,
noting
that
most
such
machines
are
about
two
inches
thick
,
takes
exception
to
the
name
.

``
This
is
n't
quite
a
notebook
--
I
call
it
a
phonebook
,
''
he
says
.

That
ca
n't
be
said
of
the
$
2,400
notepad
computer
introduced
a
few
weeks
ago
by
GRiD
Systems
Corp.
,
a
unit
of
Tandy
.

Instead
of
a
keyboard
,
it
features
a
writing
surface
,
an
electronic
pen
and
the
ability
to
``
read
''
block
printing
.

At
4
1\/2
pounds
,
it
may
be
too
ambitiously
named
,
but
it
nevertheless
opens
up
the
kind
of
marketing
possibilities
that
make
analysts
froth
.

Palmtops
are
n't
far
behind
.

Atari
Corp.
's
Portfolio
,
introduced
in
Europe
two
months
ago
and
in
the
U.S.
in
early
September
,
weighs
less
than
a
pound
,
costs
a
mere
$
400
and
runs
on
three
AA
batteries
,
yet
has
the
power
to
run
some
spreadsheets
and
word
processing
programs
.

Some
critics
,
however
,
say
its
ability
to
run
commonplace
programs
is
restricted
by
a
limited
memory
.

Poquet
Computer
Corp.
,
meanwhile
,
has
introduced
a
much
more
sophisticated
palmtop
that
can
run
Lotus
1-2-3
and
other
sophisticated
software
programs
,
but
costs
five
times
as
much
.

At
stake
is
what
Mike
Swavely
,
Compaq
's
president
of
North
America
operations
,
calls
``
the
Holy
Grail
of
the
computer
industry
''
--
the
search
for
``
a
real
computer
in
a
package
so
small
you
can
take
it
everywhere
.
''

The
market
is
so
new
,
nobody
knows
yet
how
big
it
can
be
.

``
I
've
had
a
lot
of
people
trying
to
sell
me
services
to
find
out
how
big
it
is
,
''
says
Tom
Humphries
,
director
of
marketing
for
GRiD
.

``
Whether
it
's
$
5
billion
or
$
3.5
billion
,
it
does
n't
matter
.

It
's
huge
.
''

Consider
the
growth
of
portables
,
which
now
comprise
12
%
of
all
personal
computer
sales
.

Laptops
--
generally
anything
under
15
pounds
--
have
become
the
fastest-growing
personal
computer
segment
,
with
sales
doubling
this
year
.

Responding
to
that
demand
,
however
,
has
led
to
a
variety
of
compromises
.

Making
computers
smaller
often
means
sacrificing
memory
.

It
also
has
precluded
use
of
the
faster
,
more
powerful
microprocessors
found
in
increasing
numbers
of
desktop
machines
.

Size
and
weight
considerations
also
have
limited
screen
displays
.

The
competitive
sniping
can
get
pretty
petty
at
times
.

A
Poquet
spokesman
,
for
example
,
criticizes
the
Atari
Portfolio
because
it
requires
three
batteries
while
the
Poquet
needs
only
two
.

Both
palmtops
are
dismissed
by
notebook
makers
,
who
argue
that
they
're
too
small
--
a
problem
Poquet
also
encountered
in
focus
groups
,
admits
Gerry
Purdy
,
director
of
marketing
.

Poquet
,
trying
to
avoid
the
``
gadget
''
label
,
responded
with
the
tag
line
,
``
The
Poquet
PC
--
a
Very
Big
Computer
.
''

Despite
the
sniping
,
few
question
the
inevitability
of
the
move
to
small
machines
that
do
n't
make
compromises
.

Toward
that
end
,
experts
say
the
real
battle
will
take
place
between
center-stage
players
like
Toshiba
,
Zenith
and
now
Compaq
.

Compaq
's
new
machines
are
considered
a
direct
threat
to
start-up
firms
like
Dynabook
Inc.
,
which
introduced
in
June
a
computer
that
,
like
Compaq
's
,
uses
an
Intel
286
microprocessor
and
has
a
hard
disk
drive
.

But
the
Dynabook
product
is
twice
as
heavy
and
costs
more
than
Compaq
's
.

Compaq
's
announcement
also
spells
trouble
for
Zenith
,
which
last
year
had
28
%
of
the
U.S.
laptop
market
but
recently
agreed
to
sell
its
computer
business
to
Cie.
des
Machines
Bull
,
the
French
government-owned
computer
maker
.

Zenith
holders
will
vote
in
December
on
the
proposed
$
635
million
sale
,
a
price
that
could
slip
because
it
is
pegged
to
Zenith
's
share
and
sales
.

Compaq
is
already
taking
aim
at
Zenith
's
market
share
.

Rod
Canion
,
Compaq
's
president
and
chief
executive
officer
,
notes
pointedly
that
Zenith
's
$
2,000
MinisPort
uses
an
``
unconventional
''
two-inch
floppy
disk
,
whereas
Compaq
's
new
machines
use
the
more
common
3
1\/2-inch
disk
.

John
P.
Frank
,
president
of
Zenith
Data
Systems
,
simply
shrugs
off
such
criticism
,
noting
that
3
1\/2-inch
floppies
were
also
``
unconventional
''
when
they
first
replaced
five-inch
disks
.

``
We
do
n't
look
at
it
as
not
being
a
standard
,
we
look
at
it
as
a
new
standard
,
''
he
argues
.

Analysts
do
n't
see
it
that
way
.

``
I
ca
n't
imagine
that
you
'll
talk
to
anyone
who
wo
n't
tell
you
this
is
dynamite
for
Compaq
and
a
stopper
for
everyone
else
,
''
says
Gene
Talsky
,
president
of
Professional
Marketing
Management
Inc
.

Adds
Bill
Lempesis
,
senior
industry
analyst
for
DataQuest
,
a
high-technology
market
research
firm
:
``
We
basically
think
that
these
are
very
hot
products
.

The
problem
Compaq
is
going
to
have
is
that
they
wo
n't
be
able
to
make
enough
of
them
.
''

Compaq
's
machines
include
the
3
1\/2-inch
floppy
disk
drive
,
a
backlit
screen
that
is
only
1\/4-inch
thick
and
an
internal
expansion
slot
for
a
modem
--
in
other
words
,
almost
all
the
capabilities
of
a
typical
office
machine
.

Others
undoubtedly
will
follow
,
but
most
analysts
believe
Compaq
has
at
least
a
six-month
lead
on
the
competition
.

Toshiba
's
line
of
portables
,
for
example
,
features
the
T-1000
,
which
is
in
the
same
weight
class
but
is
much
slower
and
has
less
memory
,
and
the
T-1600
,
which
also
uses
a
286
microprocessor
,
but
which
weighs
almost
twice
as
much
and
is
three
times
the
size
.

A
third
model
,
marketed
in
Japan
,
may
hit
the
U.S.
by
the
end
of
the
first
quarter
of
1990
,
but
by
then
,
analysts
say
,
Compaq
will
have
established
itself
as
one
of
three
major
players
.

What
about
Big
Blue
?

International
Business
Machines
Corp.
,
analysts
say
,
has
been
burned
twice
in
trying
to
enter
the
laptop
market
and
shows
no
signs
of
trying
to
get
into
notebooks
anytime
soon
.

Honeywell
Inc.
and
International
Business
Machines
Corp.
received
Air
Force
contracts
to
develop
integrated
circuits
for
use
in
space
.

Honeywell
's
contract
totaled
$
69.7
million
,
and
IBM
's
$
68.8
million
.

Boeing
Co.
received
a
$
46.7
million
Air
Force
contract
for
developing
cable
systems
for
the
Minuteman
Missile
.

General
Dynamics
Corp.
received
a
$
29
million
Air
Force
contract
for
electronic-warfare
training
sets
.

Grumman
Corp.
received
an
$
18.1
million
Navy
contract
to
upgrade
aircraft
electronics
.

Avco
Corp.
received
an
$
11.8
million
Army
contract
for
helicopter
engines
.

Sharp
increases
in
the
price
of
fresh
produce
caused
Spain
's
September
consumer
price
index
to
shoot
up
1.1
%
from
the
previous
month
,
pushing
the
annual
rate
of
inflation
to
6.8
%
,
the
National
Institute
of
Statistics
said
Friday
.

The
monthly
increase
is
the
highest
recorded
in
the
past
four
years
.

The
index
,
which
registered
156.8
at
the
end
of
September
,
has
a
base
of
100
set
in
1983
and
is
n't
seasonally
adjusted
.

Prices
have
risen
5.9
%
in
the
first
nine
months
of
the
year
,
outstripping
both
the
initial
3
%
inflation
goal
set
by
the
government
of
Socialist
Prime
Minister
Felipe
Gonzalez
and
the
second
,
revised
goal
of
5.8
%
.

Japan
's
wholesale
prices
in
September
rose
3.3
%
from
a
year
earlier
and
were
up
0.4
%
from
the
previous
month
,
the
Bank
of
Japan
announced
Friday
.

The
wholesale
price
index
stood
at
90.1
,
compared
with
a
1985
base
of
100
.

Plunge
?

What
plunge
?

Twenty-four
New
York
Stock
Exchange
issues
hit
52-week
highs
during
Friday
's
trading
,
despite
the
Dow
Jones
Industrial
Average
's
190.58-point
plunge
.

Stocks
of
utilities
held
up
relatively
better
than
other
market
sectors
during
the
sell-off
.

And
among
the
issues
hitting
new
highs
were
Detroit
Edison
Co.
and
Niagara
Mohawk
Power
Corp
.

Other
major
issues
hitting
highs
included
American
Telephone
&
Telegraph
Co.
,
Westinghouse
Electric
Corp.
,
Exxon
Corp.
and
Cigna
Corp.
,
the
big
insurer
.

Of
course
,
many
more
issues
--
93
--
hit
new
lows
.

These
included
International
Business
Machines
Corp.
,
which
during
Friday
's
session
traded
below
$
100
a
share
for
the
first
time
since
June
1984
.

IBM
closed
at
$
102
,
down
$
5.625
.

Other
new
lows
included
Navistar
International
Corp.
,
Union
Carbide
Corp.
and
Bethlehem
Steel
Corp.
,
all
of
which
are
included
in
the
industrial
average
.

Meanwhile
,
two
initial
public
offerings
braved
the
cascading
market
in
their
maiden
day
of
national
over-the-counter
trading
Friday
.

Shares
of
Rally
's
Inc.
,
an
operator
of
fast-food
restaurants
,
closed
at
$
17
each
,
up
from
its
$
15
offering
price
and
shares
of
Employee
Benefit
Plans
Inc.
,
a
health-care
consultant
,
closed
at
$
14.125
,
up
from
its
$
12
offering
price
.

Ford
Motor
Co.
said
it
acquired
5
%
of
the
shares
in
Jaguar
PLC
.

Jaguar
,
the
London
Stock
Exchange
and
the
U.S.
Securities
and
Exchange
Commission
are
being
notified
of
the
transactions
,
the
company
said
.

The
U.S.
Federal
Trade
Commission
advised
Ford
last
week
that
it
would
n't
raise
any
objection
to
the
acquisition
of
as
much
as
15
%
of
Jaguar
shares
.

The
No.
2
auto
maker
disclosed
last
month
that
it
wants
to
buy
as
much
as
15
%
of
the
British
luxury-car
maker
,
the
maximum
allowed
under
current
United
Kingdom
government
restrictions
.

General
Motors
Corp.
said
it
had
discussed
the
possibility
of
a
joint
venture
with
Jaguar
before
Ford
began
buying
shares
.

GM
said
it
still
is
talking
with
Jaguar
about
acquiring
a
minority
interest
.

Investors
who
bought
stock
with
borrowed
money
--
that
is
,
``
on
margin
''
--
may
be
more
worried
than
most
following
Friday
's
market
drop
.

That
's
because
their
brokers
can
require
them
to
sell
some
shares
or
put
up
more
cash
to
enhance
the
collateral
backing
their
loans
.

In
October
1987
,
these
margin
calls
were
thought
to
have
contributed
to
the
downward
spiral
of
the
stock
market
.

Typically
,
a
margin
call
occurs
when
the
price
of
a
stock
falls
below
75
%
of
its
original
value
.

If
the
investor
does
n't
put
up
the
extra
cash
to
satisfy
the
call
,
the
brokerage
firm
may
begin
liquidating
the
securities
.

But
some
big
brokerage
firms
said
they
do
n't
expect
major
problems
as
a
result
of
margin
calls
.

Margin
calls
since
Friday
``
have
been
higher
than
usual
,
but
reasonable
,
''
a
spokesman
for
Shearson
Lehman
Hutton
Inc.
said
.

Merrill
Lynch
&
Co.
officials
``
do
n't
expect
{
margin
calls
}
to
be
as
big
a
factor
as
in
1987
''
because
fewer
individual
investors
are
buying
stock
on
margin
,
a
spokesman
said
.

Hugo
Quackenbush
,
senior
vice
president
at
Charles
Schwab
Corp.
,
the
San
Francisco-based
discount
brokerage
firm
,
said
he
did
n't
expect
any
immediate
problems
with
margin
calls
for
Schwab
customers
.

He
said
Schwab
had
increased
margin
requirements
``
so
customers
have
more
of
a
cushion
.
''

He
added
:
``
We
learned
a
lesson
in
1987
about
volatility
.

Avis
Inc.
,
following
rival
Hertz
Corp.
's
lead
,
said
it
is
backing
out
of
frequent-flier
programs
with
three
airlines
.

The
Garden
City
,
N.Y.
,
car-rental
company
said
it
wo
n't
renew
contracts
with
NWA
Inc.
's
Northwest
Airlines
unit
,
Pan
Am
Corp.
's
Pan
American
World
Airways
unit
and
Midway
Airlines
at
the
end
of
this
year
.

But
it
remains
involved
in
programs
with
AMR
Corp.
's
American
Airlines
unit
and
Delta
Air
Lines
.

Industry
estimates
put
Avis
's
annual
cost
of
all
five
programs
at
between
$
8
million
and
$
14
million
.

A
spokesman
for
Avis
would
n't
specify
the
costs
but
said
the
three
airlines
being
dropped
account
for
``
far
less
than
half
''
of
the
total
.

Budget
Rent
a
Car
Corp.
,
of
Chicago
,
and
National
Car
Rental
Systems
Inc.
,
of
Minneapolis
,
both
said
they
had
no
plans
to
follow
suit
.

In
fact
,
Budget
indicated
it
saw
some
benefit
to
staying
involved
in
these
programs
,
in
which
renters
earn
frequent-flier
miles
and
fliers
can
get
car-rental
discounts
.

``
I
can
not
see
how
this
news
by
Hertz
and
Avis
can
not
benefit
Budget
's
programs
,
''
said
Bob
Wilson
,
Budget
's
vice
president
,
marketing
planning
.

Northwest
and
Midway
are
two
of
the
five
airlines
with
which
Budget
has
agreements
.

National
also
participates
in
the
Northwest
frequent-flier
program
along
with
four
other
airlines
,
including
Delta
and
USAir
Group
Inc.
's
USAir
unit
.

A
month
ago
,
Hertz
,
of
Park
Ridge
,
N.J.
,
said
that
it
would
drop
its
marketing
agreements
at
year
end
with
Delta
,
America
West
and
Texas
Air
Corp.
's
Continental
Airlines
and
Eastern
Airlines
,
and
that
pacts
with
American
Airlines
,
UAL
Inc
's
United
Airlines
and
USAir
also
would
be
ended
...
sometime
after
Dec.
31
.

At
the
time
,
Hertz
said
its
annual
fees
to
those
airlines
amounted
to
$
20
million
and
that
the
value
of
redeemed
awards
topped
$
15
million
.

Analysts
and
competitors
,
however
,
doubt
the
numbers
were
that
high
.

Budget
said
its
frequent-flier
costs
are
``
substantially
below
''
Avis
's
level
.

Robert
D.
Cardillo
,
Avis
vice
president
of
marketing
,
said
,
``
The
proliferation
and
costs
attached
to
{
frequent-flier
programs
}
have
significantly
diminished
their
value
.
''

This
year
has
been
difficult
for
both
Hertz
and
Avis
,
said
Charles
Finnie
,
car-rental
industry
analyst
at
Alex
.
Brown
&
Sons
.

``
They
've
been
looking
to
get
their
costs
down
,
and
this
is
a
fairly
sensible
way
to
do
it
,
''
he
said
.

CBS
Inc.
is
cutting
``
The
Pat
Sajak
Show
''
down
to
one
hour
from
its
current
90
minutes
.

CBS
insisted
the
move
was
n't
a
setback
for
the
program
,
which
is
the
network
's
first
entry
into
the
late-night
talk
show
format
since
1972
.

``
I
have
every
intention
of
making
this
the
best
possible
show
and
having
it
run
one
hour
is
the
best
way
to
it
,
''
said
Rod
Perth
,
who
was
named
vice
president
of
late
night
entertainment
in
August
.

``
This
will
raise
the
energy
level
of
the
show
.
''

CBS
will
continue
to
program
action-adventure
shows
to
follow
the
Sajak
hour
.

But
CBS
News
will
extend
its
four-hour
``
Nightwatch
''
by
30
minutes
and
begin
at
1:30
a.m
.

The
show
,
despite
a
promising
start
,
has
slipped
badly
in
the
weekly
ratings
as
compiled
by
A.C.
Nielsen
Co.
,
finishing
far
below
``
Tonight
''
on
NBC
,
a
unit
of
General
Electric
Co.
,
and
``
Nightline
''
on
ABC-TV
,
a
unit
of
Capital
Cities\/ABC
Inc
.

Further
fractioning
the
late-night
audience
is
the
addition
of
the
``
Arsenio
Hall
Show
,
''
syndicated
by
Paramount
Communications
Inc
.

Tandem
Computers
Inc.
,
preparing
to
fight
with
International
Business
Machines
Corp.
for
a
piece
of
the
mainframe
business
,
said
it
expects
to
post
higher
revenue
and
earnings
for
its
fiscal
fourth
quarter
ended
Sept.
30
.

Tandem
said
it
expects
to
report
revenue
of
about
$
450
million
and
earnings
of
35
cents
to
40
cents
a
share
.

The
results
,
which
are
in
line
with
analysts
'
estimates
,
reflect
``
a
continued
improvement
in
our
U.S.
business
,
''
said
James
Treybig
,
Tandem
's
chief
executive
officer
.

In
the
year-earlier
period
,
Tandem
reported
net
income
of
$
30.1
million
,
or
31
cents
a
share
,
on
revenue
of
$
383.9
million
.

Tandem
expects
to
report
the
full
results
for
the
quarter
next
week
.

Analysts
have
predicted
that
the
Cupertino
,
Calif.
,
company
will
report
revenue
of
$
430
million
to
$
460
million
and
earnings
of
35
cents
to
40
cents
a
share
.

Commenting
on
the
results
for
the
quarter
,
Mr.
Treybig
said
the
strength
of
the
company
's
domestic
business
came
as
``
a
surprise
''
to
him
,
noting
that
sales
``
in
every
region
of
the
U.S.
exceeded
our
plan
.
''

The
company
's
U.S.
performance
was
helped
by
``
a
record
quarter
for
new
customers
,
''
he
said
.

Tandem
makes
``
fault-tolerant
''
computers
--
machines
with
built-in
backup
systems
--
that
run
stock
exchanges
,
networks
of
automatic
tellers
and
other
complex
computer
systems
.

Tomorrow
the
company
is
scheduled
to
announce
its
most
powerful
computer
ever
,
which
for
the
first
time
will
bring
it
into
direct
competition
with
makers
of
mainframe
computers
.

Tandem
's
new
high-end
computer
is
called
Cyclone
.

Prices
for
the
machine
,
which
can
come
in
various
configurations
,
are
$
2
million
to
$
10
million
.

Analysts
expect
the
new
computer
to
wrest
a
hefty
slice
of
business
away
from
IBM
,
the
longtime
leader
in
mainframes
.

``
We
believe
they
could
siphon
perhaps
two
to
three
billion
dollars
from
IBM
''
over
the
next
few
years
,
said
George
Weiss
,
an
analyst
at
the
Gartner
group
.

That
will
spur
Tandem
's
growth
.

``
I
'd
be
disappointed
if
the
company
grew
by
less
than
20
%
next
year
,
''
said
John
Levinson
,
an
analyst
at
Goldman
,
Sachs
&
Co
.

IBM
is
expected
to
respond
to
Tandem
's
Cyclone
by
discounting
its
own
mainframes
,
which
analysts
say
are
roughly
three
times
the
price
of
a
comparable
system
from
Tandem
.

``
Obviously
IBM
can
give
bigger
discounts
to
users
immediately
,
''
said
Mr.
Weiss
.

But
Mr.
Treybig
questions
whether
that
will
be
enough
to
stop
Tandem
's
first
mainframe
from
taking
on
some
of
the
functions
that
large
organizations
previously
sought
from
Big
Blue
's
machines
.

``
The
answer
is
n't
price
reductions
,
but
new
systems
,
''
he
said
.

Nevertheless
,
Tandem
faces
a
variety
of
challenges
,
the
biggest
being
that
customers
generally
view
the
company
's
computers
as
complementary
to
IBM
's
mainframes
.

Even
Mr.
Treybig
is
reluctant
to
abandon
this
notion
,
insisting
that
Tandem
's
new
machines
are
n't
replacements
for
IBM
's
mainframes
.

``
We
're
after
a
little
bigger
niche
,
''
he
said
.

Do
n't
jump
yet
.

The
stock
market
's
swoon
may
turn
out
to
be
good
news
for
the
economy
.

In
one
wild
hour
of
trading
,
the
market
managed
to
accomplish
what
the
Bush
administration
has
been
trying
to
do
,
unsuccessfully
,
for
weeks
.

It
is
forcing
the
Federal
Reserve
to
ease
its
grip
on
credit
and
it
took
the
wind
out
of
a
previously
irrepressible
dollar
.

The
resulting
decline
in
interest
rates
and
the
value
of
the
dollar
could
reinvigorate
American
business
--
indeed
,
the
entire
economy
.

This
may
sound
strangely
optimistic
.

After
all
,
until
a
few
years
ago
,
the
stock
market
was
viewed
as
a
barometer
of
the
national
economy
.

When
it
went
down
,
by
all
tradition
,
the
economy
followed
.

That
has
changed
,
partly
because
the
two
years
following
the
worst
stock-market
plunge
in
history
have
been
reasonably
comfortable
.

The
1987
crash
was
``
a
false
alarm
however
you
view
it
,
''
says
University
of
Chicago
economist
Victor
Zarnowitz
.

The
market
seems
increasingly
disconnected
from
the
rest
of
the
nation
.

Its
spasms
ca
n't
be
traced
to
fundamental
business
conditions
,
nor
do
they
appear
to
presage
major
shifts
in
the
economy
.

``
The
market
today
has
a
life
of
its
own
,
''
John
Akers
,
chairman
of
International
Business
Machines
Corp.
,
said
Saturday
.

``
There
's
nothing
rational
about
this
kind
of
action
.
''

Of
course
,
the
health
of
the
economy
will
be
threatened
if
the
market
continues
to
dive
this
week
.

Sharply
falling
stock
prices
do
reduce
consumer
wealth
,
damage
business
confidence
and
discourage
the
foreign
investors
upon
whom
the
U.S.
now
relies
for
financial
sustenance
.

The
financial-services
industry
was
battered
by
the
1987
crash
.

What
's
more
,
although
the
stock
market
is
far
less
overvalued
today
than
two
years
ago
,
the
U.S.
economy
is
weaker
.

Growth
is
slower
.

Profits
are
softer
.

Debt
burdens
are
heavier
.

But
if
the
stock
market
does
n't
continue
to
plummet
,
the
beneficial
effects
of
lower
interest
rates
and
a
lower
dollar
may
well
dominate
.

The
Fed
,
which
until
Friday
had
been
resisting
moves
to
ease
credit
,
is
now
poised
to
pour
money
into
the
economy
if
needed
to
soothe
the
markets
.

Fed
officials
may
protest
that
this
does
n't
necessarily
mean
a
fundamental
change
in
their
interest-rate
policies
.

But
the
experience
of
the
1987
crash
suggests
the
Fed
is
likely
to
bring
down
short-term
interest
rates
in
its
effort
to
calm
markets
.

Anticipating
the
Fed
's
move
,
money
traders
lowered
a
key
interest
rate
known
as
the
Federal
Funds
rate
to
8.625
%
late
Friday
,
down
from
8.820
%
the
day
before
.

Tiny
movements
in
the
rate
,
which
is
what
banks
charge
each
other
for
overnight
loans
,
are
usually
among
the
few
visible
tracks
that
the
Fed
leaves
on
the
monetary
markets
.

The
dollar
also
began
to
decline
Friday
as
the
stock
market
's
plunge
caused
some
investors
to
reassess
their
desire
to
invest
in
the
U.S.
.

Treasury
officials
have
been
arguing
for
months
that
the
dollar
's
strength
was
out
of
whack
with
economic
fundamentals
,
threatening
to
extinguish
the
export
boom
that
has
sustained
manufacturers
for
several
years
.

The
market
drop
has
now
apparently
convinced
foreign
investors
that
the
Treasury
was
right
about
the
overpriced
dollar
.

A
modest
drop
in
the
dollar
--
only
a
modest
one
,
mind
you
--
would
be
welcomed
by
the
U.S.
.

That
was
n't
the
case
in
1987
,
when
the
dollar
was
so
weak
that
some
economists
and
government
officials
seriously
worried
that
it
might
collapse
,
producing
panic
among
foreign
investors
and
diminishing
the
flow
of
foreign
capital
to
the
U.S.
.

Another
big
difference
between
1987
and
1989
is
n't
so
comforting
.

In
the
third
quarter
of
1987
,
the
economy
spurted
at
an
inflation-adjusted
annual
rate
of
5.3
%
.

The
consensus
among
economists
is
that
it
grew
a
much
more
sluggish
2.3
%
in
the
third
quarter
of
1989
,
which
ended
two
weeks
ago
.

The
plunge
in
stock
prices
``
is
happening
at
a
time
when
the
economy
has
already
slowed
down
,
''
says
economist
Lawrence
Chimerine
of
WEFA
Group
,
a
Bala
Cynwyd
,
Pa.
,
forecasting
company
.

``
A
lot
of
pent-up
demand
is
gone
.
''

Consumer
spending
did
drop
in
the
months
following
Black
Monday
1987
--
``
but
only
slightly
and
for
a
short
period
of
time
,
''
recalls
Mr.
Zarnowitz
,
a
longtime
student
of
business
cycles
.

``
That
was
offset
by
strength
elsewhere
.

{
The
effects
}
were
much
less
severe
and
less
prolonged
than
some
had
feared
or
expected
.

''
Today
,
he
frets
,
exports
and
business
investment
spending
may
be
insufficient
to
pick
up
the
slack
if
stock
prices
sink
this
week
and
if
consumers
retrench
in
reaction
.

What
's
more
,
the
corporate
borrowing
binge
has
n't
abated
in
the
past
two
years
.

``
We
've
had
two
more
years
of
significant
accumulation
of
debt
...
just
at
the
time
when
earnings
are
being
squeezed
,
''
Mr.
Chimerine
notes
.

The
more
a
company
relies
on
borrowed
money
,
the
greater
its
sensitivity
to
an
economic
slowdown
.

A
company
with
a
strong
balance
sheet
can
withstand
an
unanticipated
storm
;
a
highly
leveraged
company
may
end
up
in
bankruptcy
court
.

The
Fed
,
of
course
,
knows
that
very
well
--
hence
its
readiness
to
pump
credit
into
the
economy
this
morning
.

But
,
in
the
process
,
the
Fed
risks
reigniting
inflation
.

Even
before
Friday
's
events
,
Harvard
University
economist
Benjamin
Friedman
was
arguing
that
the
Fed
wo
n't
be
able
to
live
up
to
its
tough
words
on
eliminating
inflation
because
of
its
responsibility
to
protect
fragile
financial
markets
,
banks
and
highly
leveraged
corporations
.

The
biggest
threat
on
the
economic
horizon
right
now
is
n't
recession
,
he
reasons
;
it
's
an
outbreak
of
uncontrolled
inflation
.

In
the
end
,
the
1987
collapse
suggested
,
the
economy
does
n't
move
in
lockstep
with
stock
prices
.

The
economy
does
,
however
,
depend
on
the
confidence
of
businesses
,
consumers
and
foreign
investors
.

A
panic
on
Wall
Street
does
n't
exactly
inspire
confidence
.

Surveys
suggested
that
consumer
confidence
was
high
before
Friday
.

A
190-point
drop
is
n't
likely
to
make
much
of
a
dent
;
multiply
that
a
few
times
over
,
though
,
and
it
will
.

If
the
reactions
of
executives
gathered
Saturday
at
Hot
Springs
,
Va.
,
for
the
Business
Council
meetings
are
typical
,
business
leaders
were
n't
overly
rattled
by
Friday
's
decline
.

And
if
foreign
investors
become
a
tad
more
cautious
--
well
,
the
dollar
's
recent
strength
suggests
that
the
U.S.
can
stand
it
.

On
the
bottom
line
,
the
most
comforting
fact
for
the
economic
outlook
is
that
we
've
been
through
this
before
.

Two
years
ago
,
about
the
only
point
of
comparison
was
the
1929
crash
and
the
subsequent
Depression
.

The
doomsayers
had
a
receptive
audience
.

The
prosperity
that
followed
Black
Monday
permits
a
more
optimistic
view
today
.

At
the
very
least
,
the
establishment
here
is
taking
comfort
from
the
nation
's
success
in
handling
the
last
go-around
.

As
Sen.
Lloyd
Bentsen
(
D.
,
Texas
)
observed
yesterday
,
``
The
Fed
avoided
a
meltdown
last
time
.

They
are
more
sophisticated
this
time
.

The
chemical
industry
is
expected
to
report
that
profits
eroded
in
the
third
quarter
because
of
skidding
prices
in
the
commodity
end
of
the
business
.

Producers
of
commodity
chemicals
,
the
basic
chemicals
produced
in
huge
volumes
for
other
manufacturers
,
have
seen
sharp
inventory
cutting
by
buyers
.

Once
the
chief
beneficiaries
of
the
industry
's
now
fading
boom
,
these
producers
also
will
be
reporting
against
exceptionally
strong
performances
in
the
1988
third
quarter
.

``
For
some
of
these
companies
,
this
will
be
the
first
quarter
with
year-to-year
negative
comparisons
,
''
says
Leonard
Bogner
,
a
chemical
industry
analyst
at
Prudential
Bache
Research
.

``
This
could
be
the
first
of
five
or
six
down
quarters
.
''

Perhaps
most
prominent
,
Dow
Chemical
Co.
,
which
as
of
midyear
had
racked
up
eight
consecutive
record
quarters
,
is
expected
to
report
that
profit
decreased
in
the
latest
quarter
from
a
year
earlier
,
if
only
by
a
shade
.

Though
Dow
has
aggressively
diversified
into
specialty
chemicals
and
pharmaceuticals
,
the
company
still
has
a
big
stake
in
polyethylene
,
which
is
used
in
packaging
and
housewares
.

Analysts
'
third-quarter
estimates
for
the
Midland
,
Mich.
,
company
are
between
$
3.20
a
share
and
$
3.30
a
share
,
compared
with
$
3.36
a
year
ago
,
when
profit
was
$
632
million
on
sales
of
$
4.15
billion
.

A
Dow
spokeswoman
declined
to
comment
on
the
estimates
.

At
the
investment
firm
of
Smith
Barney
,
Harris
Upham
&
Co.
,
the
commodity-chemical
segment
is
seen
pulling
down
overall
profit
for
20
companies
representative
of
the
whole
industry
by
8
%
to
10
%
.

``
You
will
find
the
commodities
off
more
than
the
others
and
the
diversified
companies
about
even
or
slightly
better
,
''
says
James
Wilbur
,
a
Smith
Barney
analyst
.

First
Boston
Corp.
projects
that
10
of
the
15
companies
it
follows
will
report
lower
profit
.

Most
of
the
10
have
big
commodity-chemical
operations
.

Still
,
some
industry
giants
are
expected
to
report
continuing
gains
,
largely
because
so
much
of
their
business
is
outside
commodity
chemicals
.

Du
Pont
Co.
is
thought
to
have
had
steady
profit
growth
in
white
pigments
,
fibers
and
polymers
.

Moreover
,
the
Wilmington
,
Del.
,
company
is
helped
when
prices
weaken
on
the
commodity
chemicals
it
buys
for
its
own
production
needs
,
such
as
ethylene
.

Analysts
are
divided
over
whether
Du
Pont
will
report
much
of
a
gain
in
the
latest
quarter
from
its
Conoco
Inc.
oil
company
.

The
estimates
for
Du
Pont
range
from
$
2.25
to
$
2.45
a
share
.

In
the
1988
third
quarter
,
the
company
earned
$
461
million
,
or
$
1.91
a
share
,
on
sales
of
$
7.99
billion
.

Du
Pont
declined
to
comment
.

Monsanto
Co.
,
too
,
is
expected
to
continue
reporting
higher
profit
,
even
though
its
sales
of
crop
chemicals
were
hurt
in
the
latest
quarter
by
drought
in
northern
Europe
and
the
western
U.S.
.

The
St.
Louis-based
company
is
expected
to
report
again
that
losses
in
its
G.D.
Searle
&
Co.
pharmaceutical
business
are
narrowing
.

Searle
continued
to
operate
in
the
red
through
the
first
half
of
the
year
,
but
Monsanto
has
said
it
expects
Searle
to
post
a
profit
for
all
of
1989
.

Most
estimates
for
Monsanto
run
between
$
1.70
and
$
2
a
share
.

A
year
ago
,
the
company
posted
third-quarter
profit
of
$
116
million
,
or
$
1.67
a
share
,
on
sales
of
$
2.02
billion
.

Monsanto
declined
to
comment
.

But
the
commodity-chemical
producers
are
caught
on
the
downside
of
a
pricing
cycle
.

By
some
accounts
on
Wall
Street
and
in
the
industry
,
the
inventory
reductions
are
near
an
end
,
which
may
presage
firmer
demand
.

But
doubters
say
growing
production
capacity
could
keep
pressure
on
prices
into
the
early
1990s
.

In
the
latest
quarter
,
at
least
,
profit
is
expected
to
fall
sharply
.

For
Himont
Inc.
,
``
how
far
down
it
is
,
we
do
n't
know
,
''
says
Leslie
Ravitz
at
Salomon
Brothers
.

The
projections
are
in
the
neighborhood
of
50
cents
a
share
to
75
cents
,
compared
with
a
restated
$
1.65
a
share
a
year
earlier
,
when
profit
was
$
107.8
million
on
sales
of
$
435.5
million
.

Himont
faces
lower
prices
for
its
mainstay
product
,
polypropylene
,
while
it
goes
forward
with
a
heavy
capital
investment
program
to
bolster
its
raw
material
supply
and
develop
new
uses
for
polypropylene
,
whose
markets
include
the
packaging
and
automobile
industries
.

The
company
,
based
in
Wilmington
,
Del.
,
is
81%-owned
by
Montedison
S.p
.
A.
,
Milan
,
which
has
an
offer
outstanding
for
the
Himont
shares
it
does
n't
already
own
.

At
Quantum
Chemical
Corp.
,
New
York
,
the
trouble
is
lower
prices
for
polyethylene
,
higher
debt
costs
and
the
idling
of
an
important
plant
due
to
an
explosion
.

Some
analysts
hedge
their
estimates
for
Quantum
,
because
it
is
n't
known
when
the
company
will
book
certain
one-time
charges
.

But
the
estimates
range
from
break-even
to
35
cents
a
share
.

In
the
1988
third
quarter
,
Quantum
earned
$
99.8
million
,
or
$
3.92
a
share
,
on
sales
of
$
724.4
million
.

Another
big
polyethylene
producer
,
Union
Carbide
Corp.
,
is
expected
to
post
profit
of
between
$
1
a
share
and
$
1.25
,
compared
with
$
1.56
a
share
a
year
earlier
,
when
the
company
earned
$
213
million
on
sales
of
$
2.11
billion
.

Himont
,
Quantum
and
Union
Carbide
all
declined
to
comment
.

The
following
were
among
Friday
's
offerings
and
pricings
in
the
U.S.
and
non-U.S.
capital
markets
,
with
terms
and
syndicate
manager
,
as
compiled
by
Dow
Jones
Capital
Markets
Report
:

Dow
Chemical
Co.
--

$
150
million
of
8.55
%
senior
notes
due
Oct.
15
,
2009
,
priced
at
par
.

The
issue
,
which
is
puttable
back
to
the
company
at
par
on
Oct.
15
,
1999
,
was
priced
at
a
spread
of
50
basis
points
above
the
Treasury
's
10-year
note
.

Rated
single-A-1
by
Moody
's
Investors
Service
Inc.
and
single-A
by
Standard
&
Poor
's
Corp.
,
the
non-callable
issue
will
be
sold
through
underwriters
led
by
Merrill
Lynch
Capital
Markets
.

Centel
Capital
Corp.
--

$
150
million
of
9
%
debentures
due
Oct.
15
,
2019
,
priced
at
99.943
to
yield
9.008
%
.

The
non-callable
issue
,
which
can
be
put
back
to
the
company
in
1999
,
was
priced
at
99
basis
points
above
the
Treasury
's
10-year
note
.

Rated
Baa-1
by
Moody
's
and
triple-B-plus
by
S&P
,
the
issue
will
be
sold
through
underwriters
led
by
Morgan
Stanley
&
Co
.

Federal
Home
Loan
Mortgage
Corp.
--

$
500
million
of
Remic
mortgage
securities
offered
in
13
classes
by
Prudential-Bache
Securities
Inc
.

The
offering
,
Series
102
,
backed
by
Freddie
Mac
8
1\/2
%
securities
with
a
weighted
average
remaining
term
to
maturity
of
28.4
years
,
was
priced
before
the
market
's
afternoon
surge
.

Among
classes
for
which
details
were
available
,
yields
ranged
from
8.78
%
,
or
75
basis
points
over
two-year
Treasury
securities
,
to
10.05
%
,
or
200
basis
points
over
10-year
Treasurys
.

Federal
Home
Loan
Mortgage
Corp.
--

$
300
million
of
Remic
mortgage
securities
offered
by
Citicorp
Securities
Markets
Inc
.

The
offering
,
Series
101
,
is
backed
by
Freddie
Mac
9
1\/2
%
securities
.

Pricing
details
were
n't
immediately
available
.

Federal
Home
Loan
Mortgage
Corp.
--

$
200
million
of
stripped
mortgage
securities
underwritten
by
BT
Securities
Corp
.

The
agency
's
first
strips
issue
,
collateralized
by
Freddie
Mac
8
%
securities
pooled
into
a
single
security
called
a
Giant
,
will
be
divided
into
interest-only
and
principal-only
securities
.

The
collateral
is
being
sold
by
a
thrift
institution
.

The
principal-only
securities
will
be
repackaged
by
BT
Securities
into
a
Freddie
Mac
Remic
,
Series
103
,
that
will
have
six
classes
.

The
interest-only
securities
will
be
sold
separately
by
BT
Securities
.

The
principal-only
securities
pay
the
principal
from
the
underlying
Freddie
Mac
8
%
securities
,
while
the
interest-only
securities
pay
only
interest
.

Freddie
Mac
said
the
principal-only
securities
were
priced
at
58
1\/4
to
yield
8.45
%
,
assuming
an
average
life
of
eight
years
and
a
prepayment
of
160
%
of
the
PSA
model
.

The
interest-only
securities
were
priced
at
35
1\/2
to
yield
10.72
%
.

There
were
no
major
Eurobond
or
foreign
bond
offerings
in
Europe
Friday
.