Standard-Speaker from Hazleton, Pennsylvania • Page 32

Standard Speaker USINESS THURSDAY, MARCH 23, 1989 Page 32 Has industry become obsolete i country," Greenspan said. Observes Bill Davis, chief deputy commissioner for the California department of savings and loans, "You could create tremendous efficiencies if you had a single federal regulator." The first step on that road is the Bush administration proposal to place the savings and loan industry under the control of the Treasury and federal banking agencies, Davis says. "It won't happen overnight, but banks and savings and loans will eventually become one generic financial institution," Davis predicts. But such a move could have a considerable impact on the home loan market, Davis warns. "If the insurance companies and banks can make a better investment elsewhere, they will be gone," Davis says.

The savings and loan industry got its start in 1831, when 37 Philadelphia residents pooled $185 to establish the Oxford Provident Building Association. They agreed to contribute $3 a month to the venture until all had purchased a home. When the loans were paid off, Oxford Provident dissolved. Ironically, Comly Rich, the first American to purchase a home with a loan from a thrift, defaulted, and a family member had to assume the mortgage. For the first time, the common worker had a place to borrow money to buy a home.

Previously, the only way people purchased homes was by either saving the entire price or borrowing from a wealthy friend. The system grew to what sav ral ill i 4 Traditionally, savings and loans have taken short-term deposits in the form of savings accounts, money market accounts and certificates of deposit and used the money to write long-term mortgages. The government has encouraged thrifts to stay in the housing market by offering tax advantages if they kept most of their loan portfolios in residential mortgages. Banks, by comparison, primarily take deposits in the form of commercial accounts and make short-term, fluctuating interest rate business loans. They do not get the same tax benefits from making mortgage loans.

over the years, have been the only real long-term players in financing housing," Allan says. "There is a real need for an insured deposit base that can be focused on single family housing." But Greenspan and others contend that the emergence over the past decade of the Federal National Mortgage Corp. and other quasi-government agencies that purchase mortgages from the lenders for pooling into mortgage-backed securities low-risk investments that can be traded like stocks assures a continuous supply of housing funds. Alex Kyman, president of Beverly Hills-based City National Bank, said banks would be more willing to stay in the mortgage market if they could develop a stable way to finance the long-term loans. Although most mortgages are written to last 30 years, they usually turn over within six to 10 years still long for a bank.

about 30 frames per second of animated video tape. Most of the time and money is spent at the front end of the project, turning what the customer wants, whether it be a space station, a city skyline or a logo, into a computerized data base that in turn can be turned into animation. Angel said it can take up to four months to complete just a few minutes on tape. The Air Force, he said, spent $60,000 and waited nearly three months for just one minute of computerized animation. When he started, Angel said he did all the work himself, from creating to selling.

The equipment and technology were simpler then, he said. But in his second year, he hired a computer-trained employee. "I'm not at all a computer person," he said, "and I don't want to be." Each year, Angel has added to the company until he now has six employees and more than $500,000 worth of equipment. Both are something of a problem, according to Angel, a problem of finding and then keeping qualified people and staying abreast of advances in technology. FORMU-3 OPENED FOR BUSINESS Formu-3 National Accelerated Weight Loss has opened its doors in Hazleton's 29th Street Business Complex.

The new business is located in building Suite 307. Owner Sandra L. Purnell, left, is taking a routine blood pressure check on her daughter Tammy, who also is employed at Formu-3 as one of six center counselors. Formu-3 focusses on weight loss programs in a close relationship with its clients, and without the use of drugs or excercises. By JERRY HIRSCH Copley News Service Is the savings and loan industry worth saving? This year, the federal government will shut down more than 200 insolvent thrifts as part of a long-range, $174 billion plan to save the nation's savings and loan industry.

While much of that money will be used to pay off insured depositors, regulators and financial services, industry leaders are starting to wonder if any extra effort should be made to protect the troubled industry. In the past decade, government deregulation has swept away the monopoly once enjoyed by savings and loans in their primary area of business: making home loans. Although thrifts still accounted for 54 percent of the mortgages written in 1988, according to the U.S. League of Savings Associations, deregulation has made home loans available from most banks, many credit unions and insurance companies and even huge corporations such as General Motors and Sears. "This new environment may make it possible to eventually bring all depository institutions under one regulatory and supervisory system," Federal Reserve Board Chairman Alan Greenspan told members of the House Banking Committee recently.

"Ultimately, it's going to be the markets that are going to determine the banking structure in this Charles J. Palermo Palermo joins Woodlands staff The Woodlands Inn Resort, Wilkes-Barre, has announced the appointment of Charles J. Palermo to the position of director of sales. Palermo will be responsible for group sales and marketing at the resort. Prior to joining the Woodlands, Palermo served with Inn American Corp.

as the director of sales and marketing at their Sheraton Danville Inn. He also served eight years with Hershey Hotels and Resorts where he held various positions including four years as director of sales at the former Hershey Pocono Resort. The Woodlands Inn Resort, owned and operated by the Korn-feld family, is a 200-room, year-around resort and convention center. cw Animation studio finds a home ings and loan consultant Salvatorre Serrantino describes as, "The greatest delivery system for home ownership in the history of the world." The end of such a system, cautions Robert Knutzen, president of Sherman Oaks, Calif. -based DRES a real estate consulting firm, could greatly increase the cost of home mortgages.

"Although money is readily available for home mortgages today, we may find ourselves in a situation two or three years from now where the need for a specialized focus on house financing is far more apparent than today," Knutzen says. When interest rates soared in the early 1980s, Knutzen says, savings and loans were the only institutions that actively stayed in the home finance market. Moreover, Knutzen points out, in many urban regions of the country, most people can't afford to buy a home. If financing dries up, interest rates will rise, pushing up the cost of home mortgages and making home buying an even more difficult task. Eric Allan, president and chief executive of the successful Malaga Saving and Loan in Palos Verdes Estates, believes leaving home financing purely to the vagaries of the market as Greenspan suggests would be a bad national policy decision.

"Why should the first-time home buyers have to compete with junk bond financing, the leveraged buy-outs and foreign countries for capital," Allan asks. His markets were advertising agencies, television stations, large corporations and producers and directors of video films. In the first six months, "not a single job came in," he said. For the first year, total revenues reached $5,000. After that first year, his brother-in-law, his wife's sister's husband, invested in the company and was also able to help Angel secure bank financing.

The second year, revenues leaped to $25,000 and have been more than doubling since then, Angel said. Now the company's clients are a real mixed bag. "It's a weird variety of customers we serve," Angel said. Some of the animations Angel Studios has done include a flying space station for the National Aeronautical and Space Administration, flight simulation for the Rohr Corp. Other work involves animated logos for the cable television movie network Home Box Office and the all-sports television network ESPN: The ranimationsp his company produces costs an average of $1,000 a second, Angel said, with Rent-a-car By ED MOOSBRUGGER Copley News Service LOS ANGELES Dollar Rent A Car Systems Inc.

said Friday (March 17) it is forming a European alliance with England's second largest rental firm that could more than double Dollar's volume to $1 billion by 1992. Westchester-based Dollar announced that it has given the former Swan National of Great Britain a master franchise for Europe, Africa and the Middle East. The two companies hope to capitalize on an expected travel boom By RICHARD SPAULDING Copley News Service Diego Angel kept getting bugged and hooked. That's how he wound up starting Angel Studios, a computer animation company whose products run only a few minutes and costs an average of $1,000 a second. First, Angel, 42, said, "I got the animation bug," while living in Chicago.

To satisfy that urge, he went to Columbia College, a well-known film school, and then studied at the School of the Art Institute of Chicago. After that came jobs, mostly illustrating work for publications. Then one day he went to a computer graphics convention. "I got hooked," he laughed. He said he saw himself as having a computer system, producing art and having a business.

But after 15 years, Chicago had lost its glamour. On the other hand, San Diego, where Angel had relatives and friends, looked good. So in 1984 he moved there with his wife and two children, intent on starting a business about which he knew very little. After putting all the money he could scrape together into computer equipment, Angel's home-based company faced its first hurdle; how to get the word out to potential customers, not only of a new company, Angel Studios, but of a relatively new service, computer animation. The first thing Angel said he did was try to figure out his market.

Then, he said, he started making a lot of phone calls. He also made a demonstration video tape showing what Angel Studios could do. FAX UN! Starting As Low As Send Documents Instantly From Your Own Desk firm poised to expand Angel estimates it takes two or three years of school training and an equal amount of time on the job to become proficient in computer animation. To make sure he hangs on to his key employees, Angel said two weeks ago he made three of them partners in the company. Computer animation requires a "weird combination of skills," Angel said, noting that one of his ranimatorsp is a photographer and another has an architecture background.

The machinery gets outdated fast, he said. Equipment that two years ago cost $100,000 can now be acquired for only $25,000. "You really have to love this business because you don't get your money back," Angel laughed. You can buy equipment one year and the next new stuff comes out that works twice as fast and costs half as much. Computer animation is still pretty much a cottage industry, populated with firms like Angel Studios.

It's just not a cost-effective move for larger companies to invest up to $400,000 in equipment for just $30,000 to $40,000 a year in revenues, Angel said. Most of the Dollar which began in 1966 in downtown Los Angeles with a fleet of 18 Volkswagens expects to have more than 100,000 vehicles in its system by 1992, Caruso said. That's up from about 50,000 before its latest expansion agreement, which boosts the total to 80,000. Freddie Aldous, chairman and founder of Swan, said his company needed to be a major player in Europe and decided to link up with Dollar because "we felt we needed a single international name in vehicle rental." "We quite clearly need each other," Aldous said. "Dollar brings its name and internatinal 3 Months 9.70 6 Months 9.90 1 Year 10.05 2 Year 10.05 3 Year 9.75 No fee charged.

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In the next couple of years, Angel said he expects to grow to 10 or 12 employees. "You cannot stop'growing. Either you're in or you're out," Angel said. One aspect of growth has been to take Angel farther from the hands-on creative art work that first hooked him. "I never thought about it," he said, "about running the business.

I just thought about having the equipment and creating art. But I just could not keep it that way. The hard part is wearing so many hats. Some things I don't like to do, but if you don't, it won't get done." But Angel's also adjusted with the flow. "Every week I find different applications (for computer animation).

Every week there's something new. I love that aspect," he said. Angel said he's now exploring the possibility of computer animation in architecture, of doing special effects for Hollywood movies, and developing the company's own animation software. in Europe system and we bring Europe, Africa and the Middle It is our commitment to build a truly international car rental organization that will eventually cover every major market in the world." Aldous said that under the new agreement which was signed a month ago but not officially announced until Friday Dollar is already established in England, Italy, Ireland and Portugal, and is negotiating for France, West Germany, Spain, The Netherlands and Scandinavia, where it expects to establish operations by the end of the year. Dollar's present 5 percent share of the market should jump to 8 percent in Europe within 12 months, he said.

Dollar has been represented in Europe for the past 11 years through marketing agreements with vendors spread throughout the area, but felt that it needed a stronger direct relationship to fully develop the market. It began international franchising in 1972 in Mexico City, and now claims to be the second largest car rental firm in Mexico. Dollar also has expanded into South and Central America, Australia, New Zealand and Canada. Dollar has shown rapid growth in recent years, reporting a 29 percent increase in volume last year. Caruso said Dollar has added a large number of commercial accounts, and has done well with tie-ins to frequent flier programs for such airlines as America West, Braniff Pan Am and TWA.

INTRODUCING THE TM ssmn when internal European trade and travel barriers are removed in 1992. Swan, which is owned by Trustee Savings Bank of England, will now operate under the Dollar banner. Dollar had $400 million in annual rentals before the pact. That will jump to about $700 million almost immediately, with a target of $1 billion by 1992. Henry J.

Caruso, Dollar's founder and president, said the agreement is the most important in Dollar's history. Its largest previous master franchise was for the Hawaiian Islands. You can build your own retirement program, earning high interest and reducing your tax bite, with a flexible payment annuity or IRA from Motorists Life. For a special monthly payment now Inoi irorvrp compact, convenient, and affordable fax performance designed to fit your office and an attractive income for the future, call or drop by and see me today. 198889 Qualifying Member RUGGER Mike Brugger 1223 W.

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