The Press Democrat from Santa Rosa, California on November 7, 1988 · 37
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The Press Democrat from Santa Rosa, California · 37

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Santa Rosa, California
Issue Date:
Monday, November 7, 1988
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37
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Insurance firms find office workers around the globe The Press Democrat G E2 Santa Rosa, California, Monday, November 7, 1988 FnflDSFECYSi Decline of the dollar New York Time TJlhe dollar fell sharply last week, despite heavy 1 1 intervention by the Federal Reserve and the Bank U of Japan. Much 0 the downward pressure has come from fundamentals. Including a slower economy and the troublesome American trade deficit. Now, all eyes are on the Presidential race. What is the outlook for the the dollar after Tuesday; will it continue to fall? TakashlTorll Spot yea trader, Fuji Bank We're expecting some kind of a rebound, but I can't tell you when. The market will try to cover short positions and the dollar may go back to 126.50 or 127 against the yen. There will be some profit taking. A lot of people have been going short for a long time. So they want to take a profit here and now, and then wait for the dollar to come back up and then go short dollars again, maybe after the election. The administration doesn't want to let the dollar free fall right now. They do not want to give a bad impression of the current administration. That's why they are trying to smooth or halt the fall. When the election is over they don't have to worry about that and can begin to counter the economic problems by letting the dollar fall. Garrett R. Glass Vice president, First National Bank of Chicago . I am slightly in favor of a higher dollar scenario. I'm looking at the technical signals. The strongest is that as one approaches the lows for the dollar, selling interest is not that great. That's a good signal we are seeing the bottom, as opposed to going lower. , Market opinion, however, is strongly against the dollar at the moment. Most professional traders believe that Bush will win the presidency. And they are well aware that James Baker, his campaign advisor, is in favor of a weaker dollar as the easiest and perhaps least painful means of keeping the economy growing. The market will probably prepare the way for when these guys come Into office. My faith in the rally scenario for the dollar Is to give it odds of about 55 percent to 60 percent. I put the odds of the dollar going lower at 40 percent to 45 percent. John Upsky Director ot International Bond Market Research, Salomon Brothers, Inc. What's going on appears to be a reflection of the adage that if enough people believe that something will happen, it will happen. There has been enough of a conviction in the markets that the dollar will be allowed to decline significantly post-election. The participants in the market are taking actions in anticipation of that move, making it a self-fulfilling prophecy or, at least to create pressure. There are two forces at work. There are fundamental developments in the U.S. economy. If the trade data to be released in the week after the election is more favorable, it will tend to ease pressure on the dollar. The second is the degree of commitment by the Group of Seven policy makers to maintaining current exchange rate relationships. We are not seeing evidence to suggest they are prepared to change. I suspect the market will continue to test the authorities until either we get fundamental data to undercut the market assumptions or we get a clear signal from the G7 policy makers regarding their intentions. Daniel Holland Vice President, Discount Corp. otNew York You will find some support for the dollar at 175 marks and 1 23.50 yen. It will begin to move higher after the elections. There has been a lot of selling by foreign Investors. After the election, we expect to see a little buying. The Japanese began selling at the 133 yen level and continued until this week. When they began selling, gold was at $405 and now it's at $420. So certainly they are buying gold with a much cheaper dollar than months ago. That will spark some buying of dollars. And bonds seem to be at attractive levels for foreign investors. We will see renewed capital flows into the U.S. after the election. ' The old view is that a Dukakis adminstration would be worse for the dollar than a Bush adminstration. But no matter which candidate wins, the dollar's downside is limited. The myth of the Pacific Rim Report says Asian markets are far from unified E3 Rights for livestock Sweden passes laws to protect barnyard animals E4 New strategies for deM crisis j Kiwi glut turns growers glum SR farmer learned crop the hard way 1 iiui -v AGRICULTURE RTihe compost-and-manure crowd 1 1 once called it "green gold" and U whispered that you could reap $30,000 an acre, a mouth-watering prospect for any dirt farmer. But, the bloom is definitely off the fuzzy brown fruit with the emerald green Innards and the taste that defies description. Kiwi, being harvested this month, are becoming as commonplace as apples without the broad-based appeal. Sure, you see them in Aunt Mamie's lime Jello salad at Thanksgiving or floating in one of those tropical drinks topped with a tiny umbrella. But when's the last time you saw a kid pack one of the hairy critters in a lunch bag? Kiwi's huge worldwide supply and weak domestic demand are softening prices and giving kiwi farmers a royal bellyache. It's a sobering turnaround from the heady 1970s when kiwis were costly and there were sensational profits. The magic is gone. "Kiwi is not the gold mine at the end of the rainbow . . . that's for sure," said Santa Rosa kiwi farmer Sam Crowder, among those lured by the promising literature. He joined the kiwi revolution in 1975 after reading a glowing article in Sunset magazine that touted bountiful harvests and fat profits. Even those skeptical enough to double the costs and halve the revenues figured it was a crop worth planting. That's the problem. Everyone except consumers jumped on the kiwi wagon, creating a glut that just won't go away. Crowder, 67, a soft-spoken guy who says he learned about kiwi farming the hard way, wasn't banking on getting rich from his kiwi vineyard. He just wanted something he could do during his retirement that would pay his property taxes and bring in a little spending money. "It's a nice hobby but it's a good thing I have a pension. If I had to depend on them for a living I would be eating a lot of kiwi," said Crowder, who retired five years ago to the small farm he bought In 1953. Crowder said his kiwi farming experience has been a memorable one. It began when he got a bum start after buying some Inferior vines from a fly-by-night kiwi salesman. Once Crowder got the plants established he had to design a trelllsing system while literally whacking the fast-growing vines Into shape. There were hot spells, cold snaps and whipping winds. "This was all done by trlal-and-er-ror," said Crowder standing beneath the lush canopy of his kiwi vineyard. "You Just don't stick the vines in the ground and collect the profits. No sir." Kiwi vines sunburn easily and both the vines and fruit are damaged by frost. They also need good, deep soil, See Kiwi, Page E5 fir j . 1 a& f-- f " m 'y''';::::rv I , I - - Si v ! --,4 V f 'rv, World finances carry burden of ij debtor nations . 1 :! . 1 Sam Crowder, Santa Rosa, has found that growing and selling his kiwis is often difficult MARK AflONOf F By DAVE SKIDMORE AitociilH PrtM WASHINGTON A crisis, in medicine, Is the crucial point at which It becomes clear whether the patient will live or die. The world's financial system, suffering from a disease called Third World debt, has been in "crisis" now for six years, ever since Mexico In the summer of 1982 stopped paying Interest on its debt because of tumbling oil prices. . Some, pointing to the improving balance sheets of creditor banks and growing export sales by debtor countries such as Argentina and Brazil, say the crisis Is over, although the Illness remains severe. ", Others say that from the perspective of those countries owing the debt the patient has gotten no better and perhaps worse. Those countries have dubbed the 1980s "the lost decade" because they have had to sacrifice the living standards of their citizens just make interest payments. Indeed, Just recently," seven Latin American leaders, whose countries collectively owe $420 billion to banks and international lending organizations, said the crisis is acute enough to threaten the-survival of their democracies and has: produced "serious deterioration in tlje quality of life of the region's peoples." -;i Even though there Is no agreement the crisis has ended indeed some stljl fear the patient will not survive all sides agree there is movement toward 'a new crop of strategies for coping with' the $1.2 trillion in debt owed by develop-: ing countries, which is about $400 billion more than when the crisis started. ? ". When the crisis first blossomed, a doomsday scenario was In vogue: After another unexpected drop in oil prices or some other financial shock, first one then more big debtors would default, a big U.S. bank would be pulled down, the panic would spread and additional banks topple, and finally, the world's financial system would collapse. That hasn't happened. At the end of. 1982, the 17 biggest debtors including the five largest, Brazil, Mexico, Argentii na, Venezuela and Chile owed U.S: banks $91.8 billion, or 130 percent oi their capital. In other words, if all 17, countries defaulted simultaneously, U.S. banks would have been broke. I At the end of June 1988, the debtor, countries owed U.S. banks nearly as much $82.2 billion but banks had set aside reserves and the debt represented only 64 percent of their capital. . The aggregate numbers mask differ-; ences among individual banks. Large regional banks have been the most aggressive in reducing their exposure; The nine largest money center banks, however, were still on the hook for more than 100 percent of their capital at the See Debt, Page ES Sears chairman fights off would-be raiders By JULIA FLYNN SILER New York Times CHICAGO Edward A. Brennan, the man who put the world's tallest building on the auction block last week, is attempting to rede-tine Sears. Roebuck OV"-H & Co-for its 526-000 . XFl I employees, 328,000 Brennan suppliers, and 70 mil- " lion household cus tomers. It is a daunting task, even for Sears's supremely confident chairman and chief executive officer, who arrived at the top of the Sears tower three years ago after 30 years in ine company s j merchandising group. Brennan is not only attempting to supplant some of Sears's most deeply imbedded merchandising traditions with unfamiliar ideas, he is also cutting costs and squeezing assets with a ferocity that is wounding morale at the giant retail and financial services company. In an era of multibillion-dollar takeovers, Brennan is well aware that he may not have long to prove his vision of Sears as a national merchant of goods and services will succeed in producing healthy profits for the company and its shareholders. Recently he has come under intense pressure to defend Sears against those on Wall Street who argue the company should be broken up and sold In parts because its asset value is much greater than the price of its stock a formula that often leaves a company vulnerable to takeover. The company's breakup value has "Ed Brennan is only one person against an entrenched bureaucracy that is almost twice the size of the Marine Corps." MONROE H. GREENSTEIN, ANALYST been estimated to be as high as $95 a share, a staggering premium of about $30 over its recent trading range. "We operate today In an investment environment increasingly focused on short-term goals," said the burly, 54-year-old chief executive at a news conference held last Monday at the Sears Tower. "Sears has not been untouched by the rumor and speculation that thrive In these conditions." To quell any takeover rumors and restore the confidence of investors, Brennan then announced a sweeping restructuring plan under which Sears will buy back 10 percent of Its stock, sell the Sears Tower, divest a unit of its Coldwell Banker real estate group, and shift the pricing strategy of its merchandise group. The plan represents the broadest restructuring at Sears since 1981, when See Sears, Page ES mm 'WOO if'fnf W in Sonoma County's Oldest Local Savings and Loan NORTHBAY SAVINGS and LOAN ASSOCIATION Santa Rosa: 528-4010 -1791 Marlow Road, Marlow Center Downtown Petaluma: 778-3335 - 20 Petaluma Blvd. South Petaluma Plaza North: 778-3315 - 311 North McDowell Blvd. RohnertPark: 584-0143 - 6301 State Farm Drive neaiasourg: hjj-ojj - hou teenier orreei -Forestville: 887-1591 - 6661 Front Street fsj

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