The Des Moines Register from Des Moines, Iowa • Page 14

writ RICK JOST, business editor, 515-284-8258 I ii ii i i Thursday, September 12, 1991 5S Ijfe I INTEREST RATES State gives BUSINESS ROUNDUP Consumers find mixed blessing with today's lower interest rates Dow 30 Industrials Gold Comex Spot green light to Caller ID i miiii 1 By JILL VAN WYKE Rtdtttr Buikwu Writer ASSOCIATED PHESS US West Communications was given the go-ahead Wednesday to reintroduce its Caller Identification telephone feature in Iowa. Crude oil October The decision upset advocates for battered Bonds 30-year Treasuries Cra-dli Card 18.94 Interest rates Declining Interest rates have been bad for savers but good for those who need loans. women and sexual assault victims, who had strenuously fought Caller ID, a feature that identifies to the recipient of a phone call the number of the person placing the call. The opponents fear it could jeopardize a woman's privacy, anonymity and safety. The Iowa Utilities Board unanimously 20 19 18 17 16 15 14 13 12 11 10 9 8 7 11.57 agreed to permit US West to offer Caller ID to its Iowa customers and compromised on the issue of per-line blocking, which automatical 6-Month CD Yield qualify for a mortgage when rates were higher.

Some say their mortgage payments are even lower than the rents they had been paying. In addition, many homeowners with existing adjustable-rate mortgages are reporting, or else expecting, lower monthly payments as current rates are adjusted downward to reflect prevailing rates. But while these key borrowing rates have declined rapidly, so have rates for savers. Robert Heady, publisher for North Palm Beach, Bank Rate Monitor, which tracks bank interest rates, says rates on certificates of deposit are the lowest they've ever been and poised to go NEW YORK, N.Y. (AP) Interest rates are falling, but for many Americans the drop is a double-edged sword.

To those living on fixed incomes, like the elderly, it's meant getting by with less, as returns on bank 1 deposits or Treasury i bonds move down. Others are reaping big savings in household expenses with mortgage rates at 4-year lows. Economists say the ride down isn't over since the country has yet to make a convincing comeback from the recession, which began in the summer of 1990. To that end, the Federal Reserve has been nudging rates lower. By keeping rates down, the central bank figures it i I New Car Loan 8.0 7.5 7.0 6.5 6.0 5.5 5.0 5.54 SWlltll" IB! dHtA att tttt aMh ttLftsi iui SONDJFMAMJJAS 1990 1991 SONDJFMAMJJAS 1990 1991 9391 Intel making network products Intel Corp.

on Wednesday moved into the market for computer networking by introducing 23 products that let desktop PCs communicate with other computers and send and receive faxes over phone lines. Intel, which makes the X86 line of microprocessor "brains" found in most personal computers, said the new products make it easier for businesses to build, use and manage computer networks. The new software and hardware products include adapter boards, network management tools and built-in testing and monitoring technology. Time Warner adds cable unit Time Warner Inc. said Wednesday it has Source: Bank Rate Monitor ly blocks transmission of a caller number with every call.

"Run Over Us" Board chairman Dennis Nagel said the board shouldn't blvk the arrival of new telephone technology. "It will simply run us over if we try to stand in its way," he said. "We should not discourage the offering of new tele- phone services." Board member Emmit George called Caller ID "a dramatic step" and cautioned that it will be a big change for the public that will require some adjustment. US West customers who occasionally want to block transmission of their number can punch in a code before dialing. "Per-call.

blocking," as it is called, will be available for free. Per-line blocking will be available to any customer for free for the first six months after Caller ID is introduced. After six months, there will be a monthly fee, the amount of which hasn't yet been determined, Can't Afford Fee Victims' advocates had pushed the board to make per-line blocking available for free to anyone who wanted it. They argued that many women and the crisis centers that help them can't afford to pay a monthly fee. "I feel minimized," Dianne Fagner, executive director of the Iowa Coalition Against Domestic Violence, said after the board's meeting.

"We hoped that our concerns would be taken into account and taken very seriously. It feels like the reality of battered created a division to oversee most of its inter lower. The yield on the six-month CD, for instance, now averages 5.54 percent, down from 7.70 percent a year ago. On a one-year CD the average yield is 5.81 percent, down from 7.84 percent. "Rates are dropping every week.

You're down at the measly passbook (savings account) level," said Heady. With inflation and taxes, he said, some people are actually losing money. Charles Clough, chief investment strategist for Merrill Lynch says personal INTEREST Pleose turn to Page 8S points this year to 8.5 percent, a 3-year low. Mortgage rates have followed suit, fluctuating now in the 9 percent range on 30-year fixed loans, the lowest level since the 1987 winter, and at around 6 percent for the first year of adjustable-rate loans, the lowest ever. Lenders nationwide said mortgage volume rose during the spring-summer home-selling season thanks to the drop in interest rates, with many homeowners substantially lowering their monthly payments by refinancing at a lower rate.

Also benefiting were many first-time buyers, who might have been unable to can jump-start the economy because businesses and consumers will borrow more. "It looks like the recession is over, but the recovery is sluggish. The Fed wants to see more buoyancy in the economy," said William Sullivan, director of money market research for Dean Witter Reynolds Inc. Since February, the Fed has cut the discount rate, the loan fee charged to member banks, a full percentage point to a five-year low of 5 percent. In recent weeks, it has injected more money into the banking system, thereby helping lower other rates.

Banks have responded by trimming their key prime lending rates lVz percentage ests in basic cable television programming. Time Warner Cable Programming Inc. will oversee Time Warner's 20 percent stake in Turner Broadcasting System Inc. It also will be responsible for the planned 24-hour news channel for New York City set to be launched next year, a pay-per-view service to be launched by the end of the year in the Queens borough of New York City and an experimental local channel in Rochester. Treasury tries to squelch bogus bids By STEPHEN LABATON Penwest plant planned Cedar Rapids has been chosen by a Wash Niw York Tlmti Associated Presi ington state company as the site for an $8 mil WASHINGTON, D.C.

The Treasury De lion plant to make microcrystalhne cellulose (MCC), an inactive ingredient in tableted and women has not been taken seriously. Elizabeth Barnhill, executive director of the Iowa Coalition Against Sexual Assault, said, "This does not meet the needs and concerns we addressed. There will be a cost to victims." Fagner and Barnhill said they didn't know CALLER ID capsulized medicines and vitamins. Penwest Ltd. of Bellevue, expects to break partment, responding to growing criticism over its handling of the scandal at Salomon Brothers on Wednesday announced significant new rules aimed at combating corruption in the market in which it sells hundreds of billions of dollars annually in government bills, notes and bonds.

ground for the plant later this year, with com pletion scheduled for late summer of 1992, a company statement said. Penwest operates Please turn to Page 8S Penf ord Products Co. of Cedar Rapids, which The scandal continued to grow Wednesday produced specialty chemicals for with new disclosures by Richard Breeden, chairman of the Securities and Exchange Commission, that other firms and banks may have misled government-backed lenders that Thompson: I was fired raise money separately from the Treasury. The scandal has forced officials and law Neumann Bros, wins contract Neumann Brothers Inc. of Des Moines has been awarded a $14.6 million construction contract from the Department of the Army for two motor vehicle storage buildings and an armory at Camp Dodge.

A spokeswoman for U.S. Sen. Charles Grassley's office said ill 1 makers in Washington to re-examine the way the government finances the nation's debt and the informal manner in which the $2.3 trillion market has been regulated. The Treasury new measures include ac By WILLIAM RYBERG Rtelitw Builntu Writer Talmage "Tommy" Thompson, former general manager of Des Moines independent television station KDSM, says his departure from the station amounted $10.4 million of the money is from the federal celerating plans to automate a market that has relied for nearly two centuries on paper government, with the state supplying the remainder. The buildings will be part of the state emergency operations center.

bids placed in wooden boxes by runners at the final minute before the auction closes. Written Verification to being fired because the new owners had set down conditions impossible him to work under. Thompson was replaced as general manager when the new owner, River City They would also require written verifica tion of large winning bids to guarantee their Dow edges up amid apathy Prices closed narrowly mixed on Wall authenticity and prevent the kind of phony bidding Salomon has said was executed without its customers' authorizations in an effort to corner the market in government bonds. Broadcasting oi at. louis, Street Wednesday as apathetic traders waited Interim Salomon Chairman Warren Buffett testified on Capitol Hill Monday that 90 people at Salomon were paid bonuses of $1 million or more before he took charge at the company.

for the Federal Reserve to push interest rates Treasury Secretary Nicholas Brady said lower. The Dow Jones industrial average rose the steps were being taken to ensure the "continued integrity" of the government securities market. 4.47 to 2,987.03 after dropping more than 24 points the previous session in a computer-program assisted sell-off. "In addition to these actions, the Treasury Department will continue to review the auc I Vi -took over earlier this sum-U7A I mer. talmacb In an interview, Thomp- Thompson son objected to a Register article and headline that said he'd resigned from the station and he disputed the account of his departure given by Tom MacArthur, KDSM's new general manager.

"Our position is, at this time, based on everything that occurred, that I was Thompson said. Thompson said that before the changeover he was first told he'd remain as general manager, but later was informed he'd be given a new high-profile job in which a base salary THOMPSON American to scale back growth ulators and Warren Buffett, the new chairman of Salomon. Jerome Powell, assistant Treasury secretary, acknowledged at the hearing that existing regulations and their implementation had been inadequate. "There is no question that it can be improved, and improve it we will," he said. The scandal expanded beyond the Treasury securities market when Breeden said the SEC had discovered a "distressingly large" number of investment houses and banks that appeared to have intentionally misled other government agencies and federally backed lenders that sell hundreds of billions of dollars in securities.

ment by providing them with confidential information about auctions and the nation's finances. Meetings in Washington Treasury officials have met every three months in Washington with a trade group of primary dealers. The dealers were asked not to immediately share the information they were given with their companies. Sen. Donald Riegle who heads the banking committee, said, "The cozy relationship between the regulators and the primary dealers must be fully examined and I believe ended." At a subcommittee hearing Wednesday, he and other senators closely questioned the reg American Airlines on Wednesday said it would slow down its tion process to determine what other changes may be appropriate," Brady said.

The changes are intended to stop the mounting congressional complaints about the market in which about $117 billion worth of government securities changes hands daily. The changes also are aimed at deflecting accusations that the Treasury has been too close to the market's biggest players and unfairly favored the 39 primary dealers who buy most of the bonds issued by the govern- expansion, illustrat ing the industry's fi nancial pain. Profits simply aren't what they need to be," said Robert L. Please turn to Page 8S "it 1 i Crandall, chairman of the airline's parent. AMR Corp.

Con Ed stock a bargain: The hitch? New York City Robert L. Crandall Crandall told securi- ties analysts in New York he was planning There usually is a way. Stock prices are high, but a bargain ap cutbacks of $400 million over tne next two years and more than $500 million over five vears. Crandall acknowledged fares may JIM LAWLESS pears in New York City. Interest rates are need to eo up and lashed out at executives at some competitors "who seem to believe their Investor's Memo mission in life is to put every living numan being on an airplane at any price Avon Products Inc.

said it would take a $75 million charge in the third quarter to remove debt from its balance sheets. portion of their portfolio probably is best left with professional money managers. Vestaur Securities (NYSE 14), a closed-end fund, gives investors an opportunity to diversify their portfolio with a stock-like investment that has its money in bonds. Closed-end funds are managed pools of money like the more familiar open-end mutual funds, but the closed-end variety has a limited number of shares that trade on an exchange, while open-end mutual fund shares are always Increasing or decreasing in number depending on sales to the public. Vestaur trades on the New York Stock Exchange at around $14 a share, where the Indicated $1.21 annual dividend, including extras, provides a yield of 8.6 percent.

Jim Lawless cannot answer mail individually but he will answer selected investment questions in this column. Write to him at The Dea Moines Register, P.O. Box 957, Des Moines, la. 50304. Readers are reminded that brokerages may have investments in the stocks they said.

Con Ed is one of the few high-quality electric utilities whose stock has not approached or exceeded its peak, he said. Signs of Life The New York economy is not blazing, but it is showing signs of life, which is good news for Con Ed because 70 percent of the company's revenues come from local commercial and industrial customers, Springer said. On the spending side, management says Con Ed probably won't have to build new plants to meet demand for 20 years. Con Ed should earn an estimated $2.35 a share this year, Springer said, about the same as last year when earnings were $2.34. Other analysts are estimating the utility's 1991 earnings at $2.30 to $2.45 a share.

When the experts tell investors that they should have some of their portfolios in fixed-income securities, they are talking about diversification and they are talking about bonds. But bonds remain a mystery to many investors and management of the fixed-income Air Canada said it will dismiss 650 people low, but an 8.6 percent return pops up in a managed pool of conservative bonds. Consolidated Edison (NYSE 25) has a rock solid balance sheet, receives top ratings for financial safety, has raised its dividend 15 consecutive years and provides a decent yield of 7.3 percent. But the price of the common stock is still down more than 15 percent from its 1990 peak of $29.25, one of the few high-quality electric utility stocks that has not approached or exceeded its peak. What is the matter here? The New York City is the matter.

Con Ed lights up the Big Apple, but the city has been in an economic brownout for the past four years, pressing Con Ed's earnings lower in 1990 and in the first half of this year. Investors have ignored the stock, leaving it in the cheap seats with a price-earnings multiple of 10. Nearly half of the analysts who follow the stock have no opinion onjtspotentialand the and temporarily lay off another 'lib employees over the next few months. The airline lost about $110 million in the first half of this vear. The morning San Diego Union and after rest are fairly evenly split, with five recommending sell and four urging buy, according to Zacks Investment Research of Chicago.

Con Ed common is the newest addition to the model portfolio managed by Executive Wealth Advisory, said Philip Springer, editor of the market letter published by the National Institute of Business Management Inc. of New York. The managed stock portfolio has returned 23.8 percent for the year through Aug. 22, compared with an 18.5 percent gain for the Standard Poor's 500 stock index, Springer noon San Diego Tribune will merge, in eariy 1992 into a single newspaper with morning and afternoon editions. Shrinking afternoon circulation was blamed for the merger.

Aetna Life Casualty Co. will cut about 150 jobs in Hartford, as the result of the sale of its individual insurance business to Mutual of Omaha for $18 million..