Chicago Tribune from Chicago, Illinois on September 20, 1990 · 41
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Chicago Tribune from Chicago, Illinois · 41

Chicago, Illinois
Issue Date:
Thursday, September 20, 1990
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s - Section 3 (ThitagO (Tribune Thursday, September 20, 1 990 7T . i..,. JL Seidman Ticker Stocks lower in Tokyo: The Nikkei Stock Average closed at 23,60X98 on Thursday on the Tokyo Stocks Exchange, down 123.19 points, or 0.52 percent Pan Am cuts jobs: Pan Am Corp. Chairman Thomas Plaskett said the company is cutting 2,500 jobs from its work force through voluntarieaves of absence, attrition and furloughs in the fourth quarter. Plaskett said the company is cutting its systemwide capacity by about 12 percent, to 42.95 billion available seat miles in 1991 from 46.3 billion this year. RTC seeks more' funds: The Resolution Trust Corp., the federal agency created to sell problem savings and loan institutions and their assets, said it will need up to $60 billion more for fiscal 1991 to cover losses from the troubled thrifts. RTC Chairman L. William Seidman said the agency, if it continues its current pace of disposing of thrifts, will have used virtually all of the $50 billion provided to it by last year's thrift bailout legislation to cover losses. ' D Housing starts continue to fall: New housing starts declined nationally in Au-' gust for the seventh month in a row, hitting their lowest level since the end of the last recession. But economists were encouraged by an uptick in the Midwest, West and Northeast 2 indicted in bank fraud: James F. Brennan of Lake Forest and J. Edward McHugh of Norwell, Mass., were indicted by a federal grand jury in Boston on charges of defrauding the CarnbridgePort Savings Bank of Massachusetts. The government alleged that Brennan illegally received about $2.6 million in unsecured loans while McHugh was senior loan officer at the bank. Neither Brennan nor McHugh could not be reached for comment D Olympia & York fundraising: Canadian real estate firm Olympia & York Developments Ltd. is seeking to sell a 20 percent stake in its U.S. real estate portfolio to raise cash. The firm, owned by the Reichmann fam ily ot loronto, has hired the investment bank of Lazard Freres & Co. to seek buyers. D Waste Management buyback: Waste Management Inc. said directors authorized the repurchase of up to 25 million common shares in the open market or in private transactions in the. next 24 months. The Oak Brook-based company has about 486 million shares outstanding. D T-note sale next week: The Treasury plans to raise $2.63 billion in fresh cash Tuesday and Wednesday with the sale of $1 1.5 billion two-year notes and $8.25 billion four-year notes, respectively. The balance of the 'proceeds will be used to redeem $17.13 billion in maturing notes. The new notes will be dated Oct 1, 1990, and will mature Sept 30, 1992, and Sept. 30, 1994, respectively. New MidCon chief executive: Occidental Petroleum Corp. said John F. Riordan has been elected chief executive of its MidCon Corp. natural gas transmission subsidiary in Lombard. O.C. Davis, 70, who had been Sony introduces Walkman-sized, rvAm i vai sr jl piciyio NEW YORK (Reuters) Sony Corp. Wednesday introduced a personal tape player that otters the sound quality ot a compact disc in a machine only slightly bigger than the smallest Walkman on the market The company, which also introduced a version of the machine for cars, hopes to capitalize on the immense popularity of its original portable cassette player while luring consumer interest in the costly new technology. The personal digital audio tape player, the first machine of its kind, costs $850, while the DAT car player will sell for $1,100. The products, which were also introduced Wednesday in Japan, will be available in the United States in December. The original Walkman, which was a tremendous success for Sony, was introduced in 1980. DAT players use a digital coding system to store musical signals, similar to computer code; rather than the patterns used on traditional cassette tapes. The DAT machines can play and record sound with the high clarity of compact disc players. They also can copy CDs on four-hour cassettes less than halt the size of standard cassettes, and tracks can be scanned, searched and shuffled. Sony has the resources to supply music for its DAT machines through CBS Records, which it bought for $2 billion in 1988. The capability of DAT machines to clone try, which thwarted introduction of the machines three years ago. That forced a renewed debate over how to introduce DAT while protecting the rights of artists to control duplication of their works. ' In July 1989, record companies and elco- , tronics makers resolved the feud by setting a technical standard in the machines that permits listeners to make unlimited DAT copies from CDs, but blocks consumers from making further copies from the DAT recording. - - ii i ! V m4 . f i Tribune photo functions Traders in action at trie Chicago Board of is considering replacing existing facilities with a Trade in 1933. The exchange, founded in 1848, new trading floor costing up to $100 million. Merc, Board of Trade look at merging some Some foresee a full union for fierce rivals By William B. Crawford Jr. sci tc .iiUl - -71 r i . In a stunning announcement Wednesday, the Chicago Mercantile Exchange and the Chicago Board of Trade said they would explore consolidating critical exchange operations, a move seen by many as the first step toward a merger of the world's two largest futures exchanges. Leo Melamed, chairman of the Merc's executive committee, and William F. O'Connor, chairman of the Board of Trade, said a newly created committee will study the possible merger of international marketing, trade-clearing and systems-development efforts to increase efficiency and cut costs for exchange members and market users. O'Connor and Melamed underscored the logic of cutting costs by melding these essential operations, but did not rule out creation one day of a single exchange, a dream for some at the exchanges, but a nightmare for others. Industry observers generally were enthusiastic about the announcement, but cautioned that a single exchange is years away, even if daunting obstacles are overcome. Among the obstacles are cultural differences between the memberships, which has led to open enmity in the past, and different values and voting strengths of various levels of memberships. But development of a global economy and competitive pressures have taken some of the steam out of the exchanges' traditional rivalry. If a merger creates a more potent exchange with a higher volume of trading, it could preserve and enhance Chicago's role as the leading international center for futures trading. "By this move, we reap incal- m Tribune photo by Carl Wagnor The landmark Chicago Board of Trade Building at LaSalle Street and Jackson Boulevard. Vs. a -J? -i f?,;n J- :t . :t r in 0$ rv. lk IMM ml .MUM lit 1 a i'SS, - M MR A swot nmn nmmrm&mmywm . k . . : ii ii lift . uiM '.X Trtburw photo by John Dzlekan The Chicago Mercantile Exchange on South Wacker Drive. The CBOT may use a vacant trading floor at the Merc. nancial dealings of his now-defunct firm, Stotler Group Inc. Thomas Donovan is president and chief executive of the Board of Trade. In a measure of how serious the Merc and the Board of Trade are in merging some operations, O'Connor said that a move of some CBOT trading pits to an empty, 30,000-square-foot trading floor on the seventh floor of the Merc was a possibility. The Board of Trade is considering replacing its existing facilities with a new trading floor costing up to $100 million. , "The duplication of effort causes a mind-boggling waste of See Exchanges, pg. 2 Donovan , Melamed culable savings, but we retain the competitive spirit which is so vital," said O'Connor who became CBOT chairman in August, when his predecessor, Kar-sten Mahlmann, resigned amid controversy surrounding the fi- v4 v " "-4 Tribune photo by Jot Mora The frenzy of trading at the Chicago Mer- Merc and the Board of Trade has slowed canine txenange.. i racing volume at tne after a banner 1989. Greenspan gives even edds that recession is near By Michael Arndt Chicago Tribune WASHINGTON Federal Reserve Chairman Alan Greenspan said Wednesday that the oil price shock of 1990 is reviving the twin economic scourges of the 1970s: worsening inflation and growth so sluggish it borders on recession. The nation is not yet in a re-. cession, Greenspan said, but odds are at least even that one is around the corner. In fact, some regional economies have already begun shrinking, and growth elsewhere, including the Midwest, is slowing, the Fed said in a report issued separately. "I don't see as yet any evidence of an immediate day-by-day deterioration," Greenspan told the Joint Economic Committee of Congress. But he added: "I would not want to assure you that that will go on indefinitely.... The oil shock has clearly increased both the probability of inflation and recession." - Moreover, he conceded, the Federal Reserve can do Utile to lessen those chances. Lower interest rates could spur the economy, but they could also exacerbate inflation. Meanwhile, higher rates could quell inflation, but they could choke the economy. . : "We must not lose sight of the fact that there is no policy initiative that can in the end prevent the transfer of wealth and the cut in our standard of living that I -f ' mi' AP Lasarphoto Federal Reserve Chairman Alan Greenspan arrives to testify before Congress on Capitol Hill Wednesday. stems from higher prices for imported oil," Greenspan said. A recession would spell 'big trouble for the federal budget. Congress and the Bush administration are attempting to trim the 1991 deficit, which private economists say could swell to $250 billion. A recession would add to that figure, perhaps significantly, he said. That is one reason Greenspan said it is imperative that budget See Greenspan, pg. 2 New philanthropic formula at Field's Parent favors grants over events By Marianne Taylor At many charitable affairs in the last few years, Marshall Field & Co. and its chief, Philip Miller, played a leading role in helping raise millions of dollars for various causes. This fall, as Dayton Hudson Corp. quietly absorbs Field's, its new acquisition, executives at the firm where Philip Miller no longer works are dramatically changing how the retailer fits into the Chicago area's charity scene. For a start, Field's will sponsor far fewer parties and benefit luncheons those affairs where the . city's social elite, wearing high-fashion glitter, peck cheeks and pay handsomely in support of causes ranging from literacy to AIDS care, research and education. The new Field's has adopted the more formal and, according to Field's executives, more generous, philosophy of its corporate parent Dayton Hudson has given S percent of its taxable income to charitable causes every year since 1946. Last year, it provided more than $22 million to 2,000 programs in 33 states. Now, most funds granted through Field's will go directly to organizations that successfully apply for grants, said Kassie Davis, director of public affairs for Field's. "The approach is different," Davis said. "Much of Marshall Field's community giving was in its sponsorship of benefits, and Dayton Hudson doesn't do that much of that type of thing," she said. "Benefits don't tend to be as effective as direct grants in getting to the community' she said, even if they do help keep a cause in the public view. Grant applicants must outline their programs in writing and fit them into guidelines set by Dayton Hudson, which intends to carry out its "focused giving" program in Chicago. Dayton Hudson believes that strategy provides the biggest bang for its charitable dollar by isolating areas of concern . to which it devotes most of its funding, Davis said. Some fundraisers who have read the new guidelines, however, worry that AIDS-related causes, a priority for Field's under Miller, will receive much less attention See Field's, pg. 2 FCC denies WSNS-TV new broadcast license By Steven Morris The Federal Communications Commission said Wednesday that it will take away the broadcasting license of WSNS-Ch. 44, the largest Spanish-language television station in Chicago. . " The FCC denied the license renewal application of the station's owner, Video '44, and granted the competing application of Monroe Communications Corp. for a new television station that would broadcast on Ch. 44. Video 44 is a joint venture of Harriscope of Chicago Inc.: Essaness Theatres Corp.; and National Subscription Television of Chicago Inc., a subsidiary of Oak Communications. The head of the joint venture is Burt Harris, brother of Chicago investor Irving B. Harris. "We obviously disagree with the FCC's action, and we will study it and appeal it," said Alan Silverman, a Video 44 partner. Meanwhile, the company will continue to broadcast from its facility at 340 W. Grant PL Its signal extends 50 miles around Chicago. The FCC action came eight years after Monroe began a challenge to Video 44's license, alleging that the company had violated FCC rules by reducing excessively the amount of its informational, non-entertainment programming while instituting a full-time subscription TV operation, and that it had presented obscene movies. Officials at Monroe were unsure how long it would be before they could begin broadcasting. The principals of Monroe include Chicagoan Robert Haag, a co-founder of Alberto-Culver Co.; Wayne Fickinger, former president of the J. Walter Thompson advertising agency; and Loop attorney Howard Gilbert. "Our counsel says he expects we might be in operation in anywhere from 2 to .15 months," said Fickinger. "But that's just a guess," he said. "This is a landmark case. It's never happened this way before. At this juncture, I don't think anyone's sure what hap- See License, pg. 2

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