Albuquerque Journal from Albuquerque, New Mexico • Page 53

BUSINESS Albuquerque Journal Friday, September 14, 1990 Page 1, Section Greenspan Little Chance Crisis5 ank Sees 'J 1 Of KNIGHT-RIDDER NEWSPAPERS i- )I U.S. bank failures Numbers since the Federal Deposit Insurance Corp. (FDIC) was created in 1934. Includes deposit transfers to other banks merged to prevent WASHINGTON Federal Reserve Chairman Alan Greenspan said Thursday that while the insurance fund that protects bank deposits is under "severe stress" and needs major reforms, a repeat of the savings-and-loan crisis is highly unlikely. "The chance of having the type of problems with the banks that we had with the thrifts is very significantly lower," Greenspan told members of the House Banking 200 I I -t i 160 L.jj So far 120 I in 1990 I I 129 80 ft I I i Jn i Hi I DEAN HANSON JOURNAL ICAT president Bob Grebe plays the company's new video in a huge arcade in Phoenix and other top locations for a game.

This version, which has a 50-inch screen, will soon be 30-day trial run. Local Firm Takes Aim at New Market 1935 '45 '55 '65 75 85 SOURCE: FDIC ICAT Hopes Mad Dog Will Catch Imagination Committee, citing the stronger condition of the banking industry. Greenspan's testimony came after the release of two independent reports this week that said the bank insurance fund needs to be bolstered because a recession or the failure of one of the country's biggest banks could wipe it out. The fund, which began the year with $13.2 billion in reserves, is used to pay off depositors when a bank fails. If the bank fund runs out of money, as the insurance fund for did last year, tax dollars would be used to pay the depositors.

The cost of the bailout could be $500 billion or more. Greenspan said the bank fund, now at its lowest level ever, "likely will remain under stress for some time to come" and would face even more pressures if the real estate market weakens further or the nation enters a recession. He endorsed proposed legislation that would give the Federal Deposit Insurance Corp. authority to raise premiums that banks pay into the insurance fund. But Greenspan cautioned lawmakers not to take hasty actions that could trigger more bank failures such as raising the bank premiums too high.

"Reform is required. So is caution," Greenspan said. Instead, Greenspan urged Congress to focus on long-term changes in the government's deposit insurance system. An overhaul of the deposit insurance system has been widely discussed in the wake of the debacle to limit the taxpayers' exposure to bank losses and encourage By Janelle Conaway JOURNAL STAFF WRITER An Albuquerque company that makes firearms training videos for police departments is venturing into the more frivolous field of video games. ICAT president Bob Grebe hopes the company's new game, Mad Dog McCree, will soon be in arcades across the country, alongside such hits as Teenage Mutant Ninja Turtles or Moonwalker.

Unlike existing games, which feature computer-generated graphics or animation, Mad Dog McCree uses real video. Players shoot their way through what looks like a Western movie. "It's either going to be an incredible bomb or one of the biggest things to hit the market in a number of years," Grebe said. The game was an outgrowth of ICAT's more serious business, interactive videos that take police and military personnel through life-and-death situations such as bank robberies, kidnappings and terrorist attacks. Armed with firearms replicas that shoot laser beams, trainees can fire at characters on a large screen.

The action unfolds according to where the "bullets" hit. When Grebe took the videos to police and military training shows, he found that families of his target audience loved to try their hand at them. He decided to create something similar for amusement. Earlier this year, ICAT raised about $1 When pointed at a screen, the device focuses on a point and sends a signal to the computer to mark the spot. Aim, pull the trigger and a bad guy falls off his perch on the roof.

A player can get hit three times before having to feed the machine more coins. Shoot the wrong person and a morose undertaker appears on the screen to deliver a stern message. As it advances, the game requires more skillful sharpshooting. The first game was being sent this week to a "super-arcade" in Phoenix. In the next few days, others will go to Knott's Berry Farm and a few other top locations for a 30-day trial run.

The Albuquerque company will take the performance results to a trade show for coin-operated games being held late next month in New Orleans, where the game will be formally unveiled. Grebe hopes to begin manufacturing this fall and expects to add about IS employees. The large-cabinet arcade version of the game, which will retail for about $11,500, will be made here, and a Chicago company will make a smaller version. Grebe projects more than $12 million in revenues from the games next year. He also has plans for other videos, which can be substituted in the same machines when kids get tired of gunning for Mad Dog McCree.

Grebe is considering a gangster or pirate theme next. "We're getting a lot of requests for something Iraqi," he said. Knlght-Ridder Tribune NewsJUDY TREBLE more prudent lending practices by. financial institutions. Critics say the present system, which insures deposits up to $100,000 in an account, invites bank and executives to take risks they would not assume if they were lending their own money.

Greenspan said the most important reform would require higher levels of capital, or net worth, before financial institutions could receive government insurance. That would cause bank owners to act more prudently because "more of their own money would be at' risk," Greenspan said. A second reform he endorsed was to increase the level of supervision of banks and thrifts. rt But the Fed chairman hedged on a number of other possible reforms, citing his participation in a Treasury Department study of deposit insurance reform that is not expected to be concluded before the end of the year. Those proposals include reducing the government's insurance ceiling below $100,000 per account and limiting insurance to one account only.

Currently, depositors can have multiple accounts of $100,000 and still receive FDIC insurance. million in venture capital funding, mostly through a California limited partnership called Asset Management Associates 1989. ICAT is using the funds both to expand its simulated firearms training business and to develop video games. The company was formed in 1988 as the Institute for Combat Arms and Tactics but it has changed its name to ICAT (pronounced EYE-cat). Its amusement division is called American Laser Games.

Grebe said the video-game industry has been in a slump in the past year, partly due to a lack of anything fresh. Most games, he said, feature the same type of action little computer-generated figures darting across the screen. The footage for Mad Dog McCree was shot at Eaves Ranch in northern New Mexico, using professional actors and stunt people who live in the state. Southwest Productions of Albuquerque produced the video, which cost about $125,000 to make. In the game, Mad Dog McCree has kidnapped the mayor and his daughter and locked the sheriff in jail.

The player's goal is to save the town by rescuing the good guys and shooting a lot of bad guys in between. The player shoots with an adapted BB gun that contains a light-sensing optical device. Business digest COMPILED FROM JOURNAL WIRE REPORTS Food-for-Oil Exchange With Iraq Could Bring Iran Nearly $2 Billion THE ASSOCIATED PRESS Southland Extends Offer Again DALLAS Southland owners of the 7-Eleven convenience chain, extended its deadline Thursday for an offer to exchange $1.8 billion in publicly held debt for a new package of securities. This is the third extension of the offer, first announced in March, as Southland tries to reduce its interest expense and raise $430 million in new capital. The offer has been extended to Sept.

25. It was set to expire at midnight Thursday. Southland said 50 percent to 95 percent of different classes of bonds have been turned over. Under the exchange offers, Southland bondholders and preferred stockholders are being offered new debt securities and about 25 percent of newly issued Southland common stock. Delta Announces New Fare Raise ATLANTA Delta Air Lines has announced its second fare increase in a month, blaming it on rising ing to T-VI assistant vice president Sigfredo Maestas, most of the electronic equipment will be used to implement a computer learning environment which provides self -paced, individualized instruction tai- lored to specific courses.

The equipment, given a fair market value of $283,940 by includes 15 microcomputer workgroup stations, five central processing units, software and printers for use in student labs, a central processing unit for administration of the instructional program, and equipment and software for linking the system together. The network will be used to enroll students in courses, provide computer-aided instruction, monitor student's time on tasks, test the students and record their grades. Supermarkets Get Diet Cat Food NEWPORT, Ky. Watch out, fat cats. Pet food manufacturers are competing for the right to reduce your ranks.

And the new battleground is the supermarket, rather than specialty pet stores. Starting this month, Heinz Pet Products Co. is distributing a diet cat food to grocery stores nationwide. The company says Lean Entrees, its new 9-Lives product, is the first national line of 95 percent fat-free canned cat food. He said that, in return, Iraq had agreed to give Iran 200,000 barrels of refined Iraqi oil a day and pay an undisclosed amount of money.

The source said the deal was struck during a visit Sunday by Iraq's foreign minister, Tariq Aziz. The Tehran Times, a daily newspaper close to Iranian President Hashemi Rafsanjani's government, denied that Iran would take Iraqi oil. And it quoted an unidentified "informed source" in Tehran as saying the government had not decided to allow shipments into Iraq. U.S. State Department officials said they believe Tehran will abide by the sanctions, as it has said it will.

Pierre Terzian, editor of the Paris-based newsletter Petro-strategies, said in atelephone interview that Iran "probably could supply enough food to the right people and places to keep the Iraqi economy going" for a while. Iran's oil refineries, damaged during the 1980-88 war with Iraq, are producing about 600,000 barrels of fuel and other products a day. The Iranians have been importing 150,000 barrels a day, paid for in scarce foreign currency. Peter Bogin, associate director for oil markets at Cambridge Energy Research Associates in Paris, said the reported Iranian move was probably a gesture to Iraq: "Iran must be considering its geographical position next to Iraq." NICOSIA, Cyprus Iran's reported food-for-oil deal with its old adversary Iraq could allow Tehran to boost its oil exports and earn nearly $2 billion more a year at current prices, oil experts said Thursday. That would be a bonus for cash-strapped Iran, which has already gained politically from the gulf crisis and reportedly made economic gains as well.

A well-informed source in Tehran said Tuesday that Iran had agreed to allow "humanitarian shipments" of food and medicine into neighboring Iraq, despite U.N. sanctions imposed after Iraq's invasion of Kuwait on Aug. 2. fuel prices resulting from the Persian Gulf crisis. The Atlanta-based airline said Wednesday its fares will go up 4.2 percent on Oct.

1. Delta raised its fares 5.3 percent on Aug. 30. Delta follows Pan American X17jt14 A i mi roup iw. maltnfr noivtnil Economic Fears Plunge Market THE ASSOCIATED PRESS Volume on the floor of the Big Board came to 123.37 million shares, against 129.89 million in the previous session.

Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 148.04 million shares. The government is due to report this morning on the producer price index of finished goods for August. Analysts expect the index, a measure of inflationary pressures in the pipelines of the economy, to show a big jump as a result of higher energy costs. More of the impact of the surge in oil prices this summer is expected to carry over to the September producer-price report. NEW YORK The stock market fell sharply Thursday in light but steady selling attributed to fears of impending bad news on the economy.

Analysts said worries about the touchy state of the banking system added to the market's woes. The Dow Jones average of 30 industrials tumbled 43.07 points to 2,582.67, for its biggest one-day drop since it slumped 76.73 points Aug. 23. Declining issues outnumbered advances by more than 2 to 1 in nationwide trading of New York Stock Exchange-listed stocks, with 430 up, 1,009 down and 506 unchanged. i or- J--X I Single-Family Home Building Permits Off 15 gmm JB ui iu mi nojro ui uiaimig a acuuu fj Ti.

are 0603,186 tne fuel Price increase. Pan Am said it would raise fares 4.4 percent next Tuesday. Other major carriers, some of whom made larger initial increases, said a decision to raise fares was under review. Most airlines raised their fare prices shortly after Iraq invaded Kuwait on Aug. 2, sending oil prices upward.

Delta said its fuel costs have risen 33V2 cents a gallon since July 31, which amounts to $670 million a year. Santa Fe Develops Super Hopper CHICAGO The Atchison, Topeka Santa Fe Railway is developing an articulated grain car that it claims could revolutionize grain transportation. The railcar, which Santa Fe calls the Super Hopper, will carry about 30 percent more grain and will be easier to handle than conventional hopper cars, the company said. Giving Equipment to T-VI will donate $284,000 worth of computer and networking products to Albuquerque's Technical-Vocational Institute. The equipment will be used in T-VI's Arts and Science Continuing Education and Developmental Studies departments, and in the adult learning centers at the Main and Montoya campuses.

Accord THE ASSOCIATED PRESS Getting Ready down 10.5 percent through August 1990 compared to the same eight-month period last year. January and June had the greatest drops 29.7 percent and 23 percent respectively, while April showed a 28.7-percent increase over the same month last year. March was the only other month this year to show an increase 10.5 percent compared to the same period last year. In dollar value terms, the decline in permits represents a drop of $3.3 million -i 4.3 percent in residential construction, from $76.5 million through August 1989 to $73.2 million through the first eight months of 1990. Permits for single-family dwelling additions, repairs and alterations also have declined in 1990, down 14 percent through August as compared to the same period last year.

But the valuation is down a miniscule 0.1 percent, or $7,653, from 1989's $6,477,548. Construction of new single-family homes in Albuquerque coctinued a downward spiral last month, with the number of permits off 15.1 percent compared to August 1989, according to statistics compiled by the city of Albuquerque's Planning Department code administration division. The only barometer on local new-home construction the monthly building permit feport, shows single-family dwelling permits United Auto Workers union members of Local 22 staple strike signs Thursday at their union hall across from the General Motors plant near downtown Detroit. About 300,000 workers are covered under the present three-year national labor agreement that expires at midnight tonight with the big three automakers. CM has been selected as the strike target If negotiations fail..