Four California banks-Union Bank, First Interstate, Bank of California and Wells Fargo-are among the top banks nationwide with the largest exposure to potentially risky real estate construction and development loans, a survey released Friday shows.
Several out-of-state units of California banks also have high exposures, according to the survey published by U.S. Banker magazine. Security Pacific Corp.'s Arizona operation had the highest level in the nation, although that unit is a small part of the Los Angeles banking company's overall operations.
Although some banks here could be vulnerable to a real estate downturn, statistics from regulators show that real estate-related problems among California banks are nowhere near the troubles facing institutions in the Northeast. And officials of some of the California banks in question contended on Friday that their real estate loan portfolios are of top quality or are in strong markets.
The survey comes amid increased nervousness among investors, banking experts and regulators as both residential and commercial real estate markets have softened in once-booming areas, mainly in the Northeast and Arizona. The spreading problem has led to concerns that real estate free-falls experienced in New England this year and earlier in Texas could hit California-a position generally disputed by economists and banking experts.
The U.S. Banking survey, conducted by Alex Sheshunoff & Associates of Austin, Tex., measured exposure as the ratio of a bank's construction and land development loans to its equity capital. Figures were compiled using data from the second quarter ended June 30.
The survey found that at least 40 of the nation's 100 largest banks have lent more than 100% of their equity-a measure similar to net worth-to finance risky construction loans.
The percentage for Union Bank in San Francisco, a unit of Bank of Tokyo, was 239%. The level for San Francisco-based Bank of California, a unit of Japan's Mitsubishi Bank, was 207%. First Interstate's California unit, based in Los Angeles, had a 181% level. San Francisco-based Wells Fargo's was 179%, and Security Pacific's Arizona unit led all at 347%.
But many lenders and economists believe that the situation for California lenders is markedly different than for lenders elsewhere, even though there has been sluggishness in office and hotel markets here, and the high cost of housing is squeezing potential buyers.
They note that the state's economy is still strong and diverse, demand for housing continues strong and widespread overbuilding has not occurred. Last week, economists with the Federal Reserve Bank of San Francisco said they saw no signs of a real estate recession in California. Indeed, most real estate problems for California banks are at Arizona and Texas units.
U.S. Banker Editor Robert A. Bennett said the survey is not meant to imply that banks involved in extensive construction lending will have problems, nor is it meant to predict which ones will suffer losses. But, Bennett said, banks with the highest exposure could face big losses if the nation's real estate downturn continues to spread and worsen.
Real estate loans include residential loans, such as home loans and home equity loans, and commercial real estate loans, typically those used to develop, build and purchase apartment buildings, housing tracts, shopping centers, office buildings and hotels. Commercial real estate loans are especially risky because of the volatile market.
Banks in California have increasingly turned to real estate loans, which is a higher-profit, higher-risk business. In the quarter ended Sept. 30, the portfolio of California real estate loans made by banks totaled $98.9 billion, up 25% from a year earlier, according to figures from the Federal Deposit Insurance Corp.
FDIC statistics show that the percentage of bank real estate loans made in California that are either 90 days or more past due, or do not earn interest, has actually dropped within the past year. As of Sept. 30, the percentage was 1.86% of $98.9 billion in real estate loans, 27th among states in the nation. That compares to 2% at June 30 and 2.26% at Sept. 30, 1988.
California's percentage also was below the national averages of 2.84% on Sept. 30. In addition, FDIC figures show that although real estate loans make up about 42% of the total loan portfolio of banks in California, that is not unusually high by national standards.
Saturday, January 22, 2011
SOME MORE BAD NEWS BANK OF N.E. CONSTRUCTION-LOAN RATIO IS HIGH
Bank of New England, the ailing Boston institution that last week forced out its chief executive officer, Walter Connolly Jr., ranked ninth in the country in a recent survey measuring construction lending as a percentage of net worth.
The figure vividly highlights the primary source of Bank of New England's problems as it struggles to cope with loans gone sour in a regional economy that has drawn to a virtual standstill.
With an equity base of $773 million, Bank of New England carried loans valued at $1.56 billion for construction and land development projects, or 202 percent of the bank's equity, as of June 1989.
After several years of nonstop growth, Bank of New England is having to establish reserves for millions of dollars in questionable loans. The institution is under intense scrutiny from federal regulators who have set up shop in the bank's Boston offices.
Construction lending is among the highest-risk categories of financing. "Heavy construction lending does not necessarily mean that a bank will be in trouble, but the potential for big trouble is there," said Robert A. Bennett, editor of US Banker magazine, which ranked the banks in its January issue.
Bennett said real-estate lending often puts banks on a financial roller coaster, with profits high during building booms, but busting on the downside.
The US Banker study shows that 40 of the nation's 100 largest banks have loaned more than 100 percent of their equity to finance such high-risk construction projects.
Fleet/Norstar Financial Corp. of Providence, which has been singled out as a likely bidder for Bank of New England, ranked 14th on the list, with construction loans representing 167 percent of common equity. Despite its high ranking on the list, Fleet has yet to demonstrate systemic problems with its loan portfolio.
Not so the Bank of Boston. The big money-center bank that turned inward to regional after getting burned in Latin America is feeling the real-estate pinch. It ranked 20th on the list, with construction loans representing 148.5 percent of equity.
The following lists the top 10 banks and their construction loans as a percentage of common equity as of June 1989:
[Table]
1. Security Pacific (Ariz.) 347.0%
2. Maryland National Bank 341.7
3. Midatlantic (N.J.) 327.0
4. Riggs (Washington) 281.5
5. American Security (Washington) 250.6
6. Union Bank (Calif.) 238.5
7. Barnett (Fla.) 211.4
8. Bank of California 207.5
9. Bank of New England 202.3
10. Marine Midland (N.Y.) 184.4
JSIMON;12/29 CORCOR;01/01,16:04 BANKS30
The figure vividly highlights the primary source of Bank of New England's problems as it struggles to cope with loans gone sour in a regional economy that has drawn to a virtual standstill.
With an equity base of $773 million, Bank of New England carried loans valued at $1.56 billion for construction and land development projects, or 202 percent of the bank's equity, as of June 1989.
After several years of nonstop growth, Bank of New England is having to establish reserves for millions of dollars in questionable loans. The institution is under intense scrutiny from federal regulators who have set up shop in the bank's Boston offices.
Construction lending is among the highest-risk categories of financing. "Heavy construction lending does not necessarily mean that a bank will be in trouble, but the potential for big trouble is there," said Robert A. Bennett, editor of US Banker magazine, which ranked the banks in its January issue.
Bennett said real-estate lending often puts banks on a financial roller coaster, with profits high during building booms, but busting on the downside.
The US Banker study shows that 40 of the nation's 100 largest banks have loaned more than 100 percent of their equity to finance such high-risk construction projects.
Fleet/Norstar Financial Corp. of Providence, which has been singled out as a likely bidder for Bank of New England, ranked 14th on the list, with construction loans representing 167 percent of common equity. Despite its high ranking on the list, Fleet has yet to demonstrate systemic problems with its loan portfolio.
Not so the Bank of Boston. The big money-center bank that turned inward to regional after getting burned in Latin America is feeling the real-estate pinch. It ranked 20th on the list, with construction loans representing 148.5 percent of equity.
The following lists the top 10 banks and their construction loans as a percentage of common equity as of June 1989:
[Table]
1. Security Pacific (Ariz.) 347.0%
2. Maryland National Bank 341.7
3. Midatlantic (N.J.) 327.0
4. Riggs (Washington) 281.5
5. American Security (Washington) 250.6
6. Union Bank (Calif.) 238.5
7. Barnett (Fla.) 211.4
8. Bank of California 207.5
9. Bank of New England 202.3
10. Marine Midland (N.Y.) 184.4
JSIMON;12/29 CORCOR;01/01,16:04 BANKS30
The Job Development For Women
* This study is a condensation of the 1988 Research Report 200 -- 7 by Yong-Ja Shin, Kyoung-Ock Shim, and Seung-Joo Yang.
- For the Cooperative Project with United Nations Development Program --
I. INTRODUCTION
1. Background and Purpose
According to Government data, the number of enterprise with five or more employees increased from 17,108 in 1975 to 107, 412 in 1986, and the types of occupations have increased from 1,532 in 1974 to 10,451 in 1986.
Such a growth in the domestic economy has lead to an increase in the demand of female resources in economic activities. The data show that the rate of participation by women in economic activities has increased from 39.6 percent in 1975 to 45.0 percent in 1987. This apparent increase in women's participation has been reflected in government policies which include signing the UN Agreement on the Equality of the Sexes in 1985, organized a section on women's development in the sixth economic and social development plan in 1987, and enacting a law for the equal employment for men and women in 1987.
Still, the vast majority of female workers in Korea are employed in occupations which require only simple skills. In addition, the employment rate of the highly-educated women has actually dropped from 52.9 percent in 1975 to 26.6 percent in 1986, showing that it has become increasingly difficult for those women to find jobs.
Also, as the nation's economy enters a state of steady and slower growth, it is expected that the structure of women employment will be characterized by something quite different from that of the past period of the rapid economic growth.
This research was based on an awareness of the above-mentioned problems and was conducted for the following purposes:
First, to understand the characteristics of the jobs that have been filled by women so far, and to forecast changes in the future structure of labor demands so as to identify prospective jobs for women in the future.
Second, to select from these prospective jobs occupations for low-income female workers, so as to provide basic materials for Job Development Programs for Low Income Women, which is a joint project of the Korean Women's Development Institute and the United Nations Development Program.
2. Subject Matter and the Methods of Research
A survey of personnel managers of 90 enterprises with more than 500 employees each. Interviews were conducted on learn their opinions on the prospective jobs for women.
Prior to conducting the survey, previous literature was reviewed to examine trends in women's occupations.
The 1979, 1983 and 1987 editions of Annual Report on Occupational Wage Survey, published by the Ministry of Labor, were utilized in this research, to study occupational changes during the last decade.
- For the Cooperative Project with United Nations Development Program --
I. INTRODUCTION
1. Background and Purpose
According to Government data, the number of enterprise with five or more employees increased from 17,108 in 1975 to 107, 412 in 1986, and the types of occupations have increased from 1,532 in 1974 to 10,451 in 1986.
Such a growth in the domestic economy has lead to an increase in the demand of female resources in economic activities. The data show that the rate of participation by women in economic activities has increased from 39.6 percent in 1975 to 45.0 percent in 1987. This apparent increase in women's participation has been reflected in government policies which include signing the UN Agreement on the Equality of the Sexes in 1985, organized a section on women's development in the sixth economic and social development plan in 1987, and enacting a law for the equal employment for men and women in 1987.
Still, the vast majority of female workers in Korea are employed in occupations which require only simple skills. In addition, the employment rate of the highly-educated women has actually dropped from 52.9 percent in 1975 to 26.6 percent in 1986, showing that it has become increasingly difficult for those women to find jobs.
Also, as the nation's economy enters a state of steady and slower growth, it is expected that the structure of women employment will be characterized by something quite different from that of the past period of the rapid economic growth.
This research was based on an awareness of the above-mentioned problems and was conducted for the following purposes:
First, to understand the characteristics of the jobs that have been filled by women so far, and to forecast changes in the future structure of labor demands so as to identify prospective jobs for women in the future.
Second, to select from these prospective jobs occupations for low-income female workers, so as to provide basic materials for Job Development Programs for Low Income Women, which is a joint project of the Korean Women's Development Institute and the United Nations Development Program.
2. Subject Matter and the Methods of Research
A survey of personnel managers of 90 enterprises with more than 500 employees each. Interviews were conducted on learn their opinions on the prospective jobs for women.
Prior to conducting the survey, previous literature was reviewed to examine trends in women's occupations.
The 1979, 1983 and 1987 editions of Annual Report on Occupational Wage Survey, published by the Ministry of Labor, were utilized in this research, to study occupational changes during the last decade.
Friday, January 21, 2011
Construction Boom Overbuilds Tulsa
Real estate in the 1980s came in like a lion and went out like a lamb.
Riding the tide of a booming economy, rapid population growth and the generous lending practices stemming from banking deregulation, developers built Tulsa until all sectors of real estate grew fat.
Then a locally depressed economy, population exodus and investment-prohibitive tax laws changed all that in the mid 1980s. The city has been trying to recover since.
The new decade brought in a steady stream of new Oklahomans who were either transplanted by employers or came here because they'd heard there were jobs in Tulsa. While the rest of the nation was coping with a recession, Tulsa was booming.
In 1980, the typical home here sold for about $54,352, up from the $48,000 average price the previous year. Thirty-year fixed-rate loans were made at a lofty 16 percent interest rates or higher. Inflation was so rampant that the average monthly house payment for a home bought in 1980 was 33 percent higher than that of a home bought in 1979.
But in spite of high lending rates, home sales continued to remain strong, largely because of escalating home values, which in some cases inflated one percent of more per month.
Other housing markets were growing too. Apartment vacancies ranged from 5 percent to 10 percent, even after rapid developments in the late `70s. In Tulsa, the Hardesty Co. and Lincoln Property Co. were the largest landlords and one news account proclaimed 1982 as the "Year of the Apartment Builder."
By early January in 1983, builders set a record for filing permits for single-family residences: 153 in one month.
On the commercials side, investors and developers from across the country were eyeing Tulsa. Besides the physical needs for more space, banking deregulations in the late `70s allowed for non-traditional commercial lenders, such as savings and loans and insurance companies, to get in on the development action.
"It made it lucrative for people who were not bankers to get into ownership of these types of properties. Some of those people were aggressive," says Grover Bauer, president of Bauer & Associates Realtors and author of a real estate investment newsletter.
The outside developers and investors came in and the cash flowed, putting the city full swing into a building frenzy that covered all sectors of real estate.
The central business district downtown was experiencing a 2 percent to 3 percent office vacancy rate. Citywide, the vacancy was about 6 percent and developers began leaning more towards suburban development.
Broken Arrow, already a hot spot for home building, declared itself the fastest-growing city in Oklahoma. Right behind it were Owasso, Claremore, Glenpool, Collinsville, Bixby and Jenks.
Riding the tide of a booming economy, rapid population growth and the generous lending practices stemming from banking deregulation, developers built Tulsa until all sectors of real estate grew fat.
Then a locally depressed economy, population exodus and investment-prohibitive tax laws changed all that in the mid 1980s. The city has been trying to recover since.
The new decade brought in a steady stream of new Oklahomans who were either transplanted by employers or came here because they'd heard there were jobs in Tulsa. While the rest of the nation was coping with a recession, Tulsa was booming.
In 1980, the typical home here sold for about $54,352, up from the $48,000 average price the previous year. Thirty-year fixed-rate loans were made at a lofty 16 percent interest rates or higher. Inflation was so rampant that the average monthly house payment for a home bought in 1980 was 33 percent higher than that of a home bought in 1979.
But in spite of high lending rates, home sales continued to remain strong, largely because of escalating home values, which in some cases inflated one percent of more per month.
Other housing markets were growing too. Apartment vacancies ranged from 5 percent to 10 percent, even after rapid developments in the late `70s. In Tulsa, the Hardesty Co. and Lincoln Property Co. were the largest landlords and one news account proclaimed 1982 as the "Year of the Apartment Builder."
By early January in 1983, builders set a record for filing permits for single-family residences: 153 in one month.
On the commercials side, investors and developers from across the country were eyeing Tulsa. Besides the physical needs for more space, banking deregulations in the late `70s allowed for non-traditional commercial lenders, such as savings and loans and insurance companies, to get in on the development action.
"It made it lucrative for people who were not bankers to get into ownership of these types of properties. Some of those people were aggressive," says Grover Bauer, president of Bauer & Associates Realtors and author of a real estate investment newsletter.
The outside developers and investors came in and the cash flowed, putting the city full swing into a building frenzy that covered all sectors of real estate.
The central business district downtown was experiencing a 2 percent to 3 percent office vacancy rate. Citywide, the vacancy was about 6 percent and developers began leaning more towards suburban development.
Broken Arrow, already a hot spot for home building, declared itself the fastest-growing city in Oklahoma. Right behind it were Owasso, Claremore, Glenpool, Collinsville, Bixby and Jenks.
Financial Institutions Fail, Merge, Close
The Monetary Decontrol Act, plunging oil prices, poor management, supply side economics, recession --they all add up to the worst decade since the Depression for Oklahoma's financial institutions.
"A tremendous amount of outside capital and credit came to Oklahoma from Texas and the East and West Coasts, mostly for energy and real estate deals," said Mark Brackin, head of Broadhurst Financial Group. "It fueled inflation here so substantially that once it got out of sync with market realization, the whole thing collapsed. People were making deals based on 21 percent interest rates and $40 a barrel oil."
The drop in oil and real estate prices undermined the value of borrowers' collateral. S&Ls, traditionally lenders to home and commercial builders and buyers, found themselves with more mortgage foreclosures than they ever had to face.
Also, management in some institutions failed in their jobs, making loans to people who lied on applications and not closely monitoring borrowers.
Finally, there were the out-and-out crooks -- officers and directors embezzling, making false reports and taking loan kickbacks.
"Previously, you had to show a need for a bank in order to get a charter," Brackin said. "After decontrol, if you had the money, you could get a charter. That doesn't work.
"We have 450 banks in the state now. We have worked off the excesses in the market, but there are still too many banks for the economy. We'll see a lot of consolidation in the coming years."
Oklahoma saw 102 banks and many thrifts go under during the decade.
Most failures occurred within a 50-mile radius of Oklahoma City, said Brackin, and the second-highest number happened around the Anadarko Basin.
"Most of the outside credit came through Oklahoma City then went down the road because that's where a lot of the oil and gas deals were going on. Failures were pretty light in the rest of the state -- three in the southern part and a few in the southeast around McAlester. The northeast quadrant excluding Tulsa had only three failures."
The first bank to tumble was a giant -- Penn Square Bank in Oklahoma City.
The bank collapsed in July 1982 -- after experiencing 1,500 percent growth over seven years --under the weight of energy loans it could not collect. Some of the loans were sold to other institutions around the country; Continental Illinois National Bank & Trust Co., Seafirst and Chase Manhattan Bank had more than $2 billion in loans. In fact, Chicago-based Continental Illinois needed a $4.5 billion bailout from the government in 1984 to survive the largest run on deposits in banking history.
William Patterson, former head of energy lending at Penn Square, was convicted of bank and wire fraud charges.
Another Penn Square executive and one from Continental Illinois were convicted of fraud, obstruction of justice and doctoring bank records.
The parents of First National Bank & Trust Co. of Tulsa and Liberty National Bank & Trust Co. in Oklahoma City completed a merger in the summer of 1984, creating, at the time, the largest bank holding company in the state. The new parent company, Banks of Mid-America Inc., underwent restructuring and raised $75 million in new equity capital in October last year.
Tulsa-based Republic Bank, Republic Bancorporation, Republic Trust & Savings Co. and Republic Financial Corp. went under in September 1984.
Each of those four companies, in addition to several oil firms and insurance firms, were controlled by Wes McKinney, who acted as chairman of their boards from the late 1970s through most of 1984. Regulators removed him from the financially troubled Republic companies, and Republic Trust, Republic Bancorporation and Republic Financial were placed in Chapter 11 bankruptcy on Sept. 24, 1984.
"A tremendous amount of outside capital and credit came to Oklahoma from Texas and the East and West Coasts, mostly for energy and real estate deals," said Mark Brackin, head of Broadhurst Financial Group. "It fueled inflation here so substantially that once it got out of sync with market realization, the whole thing collapsed. People were making deals based on 21 percent interest rates and $40 a barrel oil."
The drop in oil and real estate prices undermined the value of borrowers' collateral. S&Ls, traditionally lenders to home and commercial builders and buyers, found themselves with more mortgage foreclosures than they ever had to face.
Also, management in some institutions failed in their jobs, making loans to people who lied on applications and not closely monitoring borrowers.
Finally, there were the out-and-out crooks -- officers and directors embezzling, making false reports and taking loan kickbacks.
"Previously, you had to show a need for a bank in order to get a charter," Brackin said. "After decontrol, if you had the money, you could get a charter. That doesn't work.
"We have 450 banks in the state now. We have worked off the excesses in the market, but there are still too many banks for the economy. We'll see a lot of consolidation in the coming years."
Oklahoma saw 102 banks and many thrifts go under during the decade.
Most failures occurred within a 50-mile radius of Oklahoma City, said Brackin, and the second-highest number happened around the Anadarko Basin.
"Most of the outside credit came through Oklahoma City then went down the road because that's where a lot of the oil and gas deals were going on. Failures were pretty light in the rest of the state -- three in the southern part and a few in the southeast around McAlester. The northeast quadrant excluding Tulsa had only three failures."
The first bank to tumble was a giant -- Penn Square Bank in Oklahoma City.
The bank collapsed in July 1982 -- after experiencing 1,500 percent growth over seven years --under the weight of energy loans it could not collect. Some of the loans were sold to other institutions around the country; Continental Illinois National Bank & Trust Co., Seafirst and Chase Manhattan Bank had more than $2 billion in loans. In fact, Chicago-based Continental Illinois needed a $4.5 billion bailout from the government in 1984 to survive the largest run on deposits in banking history.
William Patterson, former head of energy lending at Penn Square, was convicted of bank and wire fraud charges.
Another Penn Square executive and one from Continental Illinois were convicted of fraud, obstruction of justice and doctoring bank records.
The parents of First National Bank & Trust Co. of Tulsa and Liberty National Bank & Trust Co. in Oklahoma City completed a merger in the summer of 1984, creating, at the time, the largest bank holding company in the state. The new parent company, Banks of Mid-America Inc., underwent restructuring and raised $75 million in new equity capital in October last year.
Tulsa-based Republic Bank, Republic Bancorporation, Republic Trust & Savings Co. and Republic Financial Corp. went under in September 1984.
Each of those four companies, in addition to several oil firms and insurance firms, were controlled by Wes McKinney, who acted as chairman of their boards from the late 1970s through most of 1984. Regulators removed him from the financially troubled Republic companies, and Republic Trust, Republic Bancorporation and Republic Financial were placed in Chapter 11 bankruptcy on Sept. 24, 1984.
Even more games will be available for football fans
NFL commissioner Paul Tagliabue recently stated that games not available on free TV may eventually be bought by fans on a pay-per- view channel.
In other words, if you don't want to watch Buffalo Bills all the time, there would be a way out, without spending several thousand dollars for a satellite dish. So far, Canadians do not have pay-per- view access.
But this isn't going to happen next season. It's probably at least three years down the road. There are about 12 million homes wired for the service in the U.S., with the number increasing by about 2 million annually.
The revenue potential is mind-boggling.
Every NFL game is telecast somewhere, but the maximum in league markets is five per week out of 14 and expansion is coming.
The NFL will start negotiating its new TV contract within weeks. CBS and NBC are expected to put up strong opposition to the pay-TV suggestions as it would cut into their audiences. The NFL is aiming at $23 million to $25 million per team from its new contract. Each now collects about $17 million.
* Speaking of TV, CBS has added Mike Ditka, Chicago Bears coach, to its panel of experts for the playoffs.
Injury update: Philadelphia Eagles cornerback Eric Allen is questionable and Houston Oilers defensive end Ray Childress will miss today's wild-card playoff games. Childress cracked a fibula three weeks ago and Allen sprained an ankle three weeks ago in dressing room horseplay. He was fined $6,000 by coach Buddy Ryan and has limped through the last two games.
The quotebook: Is this really Jerry Glanville speaking? The guy who insults other coaches, and has so annoyed Chuck Noll and Sam Wyche that neither will speak civilly to him? Maybe it's because Glanville's Oilers are playing the Steelers today.
"When you look at where they started the season and how far they've come, I think he (Noll) deserves (to be coach of the year)," Glanville said. "It really is a vote for 12 guys because their entire coaching staff did an outstanding job.
"When we beat them 27-0, I saw things that you see only in a championship team. They were down by 27 points and they were still trying to kill us."
* San Diego Chargers coach Dan Henning isn't "anointing" young Billy Joe Tolliver to start ahead of Jim McMahon next year, despite the youngster's late-season success.
"Those who are in a position to anoint have lifetime contracts," Henning said. "You know, popes, bishops and owners have the ability to anoint and go back on their positions - I don't."
In other words, if you don't want to watch Buffalo Bills all the time, there would be a way out, without spending several thousand dollars for a satellite dish. So far, Canadians do not have pay-per- view access.
But this isn't going to happen next season. It's probably at least three years down the road. There are about 12 million homes wired for the service in the U.S., with the number increasing by about 2 million annually.
The revenue potential is mind-boggling.
Every NFL game is telecast somewhere, but the maximum in league markets is five per week out of 14 and expansion is coming.
The NFL will start negotiating its new TV contract within weeks. CBS and NBC are expected to put up strong opposition to the pay-TV suggestions as it would cut into their audiences. The NFL is aiming at $23 million to $25 million per team from its new contract. Each now collects about $17 million.
* Speaking of TV, CBS has added Mike Ditka, Chicago Bears coach, to its panel of experts for the playoffs.
Injury update: Philadelphia Eagles cornerback Eric Allen is questionable and Houston Oilers defensive end Ray Childress will miss today's wild-card playoff games. Childress cracked a fibula three weeks ago and Allen sprained an ankle three weeks ago in dressing room horseplay. He was fined $6,000 by coach Buddy Ryan and has limped through the last two games.
The quotebook: Is this really Jerry Glanville speaking? The guy who insults other coaches, and has so annoyed Chuck Noll and Sam Wyche that neither will speak civilly to him? Maybe it's because Glanville's Oilers are playing the Steelers today.
"When you look at where they started the season and how far they've come, I think he (Noll) deserves (to be coach of the year)," Glanville said. "It really is a vote for 12 guys because their entire coaching staff did an outstanding job.
"When we beat them 27-0, I saw things that you see only in a championship team. They were down by 27 points and they were still trying to kill us."
* San Diego Chargers coach Dan Henning isn't "anointing" young Billy Joe Tolliver to start ahead of Jim McMahon next year, despite the youngster's late-season success.
"Those who are in a position to anoint have lifetime contracts," Henning said. "You know, popes, bishops and owners have the ability to anoint and go back on their positions - I don't."
Thursday, January 20, 2011
Frank Smith, investment banker Series: OBITUARIES
ST. PETERSBURG - Frank S. Smith, retired vice president and trust officer in charge of the trust investment division of Union Trust National Bank, now C & S Bank, died Friday (Dec. 29, 1989) of cancer at his residence, 650 Pinellas Point Drive S. He was 74.
``Frank was recognized by his peers and banking associates as one of the finest trust investment officers in the state of Florida and throughout the South,`` said James S. Craig, retired head of the trust department at the former Landmark Union Trust Bank.
`` Additionally, he was a very close personal friend for more than 25 years,`` Craig said.
Before joining Union Trust National Bank in 1960, he was an account executive and representative of several nationally known brokerage firms locally and in Baltimore and Kansas City, Kan., where he was with Merrill Lynch. He retired in 1979.
A native of Baltimore, he came here in 1956 from Meridian, Miss., where he also was a broker. He was a graduate of the University of Maryland, College Park, Md.
He was former chairman of the Trust Investment Committee of the Florida Bankers Association and had taught bank investment courses at the American Institute of Bankers in St. Petersburg.
He was a member of St. Peter's Episcopal Cathedral and a former member of the St. Petersburg Yacht Club and Lakewood Country Club.
During World War II, he served as a captain in the Army Air Forces.
Survivors include his wife, Elizabeth ``Libby``; a daughter, Jodi S. Borowsky, Vienna, Va.; and three grandchildren.
Friends may call from 2 to 4 p.m. Monday at Kenfield-Woodlawn Funeral Home, 200 Pasadena Ave. S, where a funeral will be held at 1 p.m. Tuesday, with the Rev. Walter Cawthorne officiating.
Burial will follow in Woodlawn-Memory Gardens Cemetery.
``Frank was recognized by his peers and banking associates as one of the finest trust investment officers in the state of Florida and throughout the South,`` said James S. Craig, retired head of the trust department at the former Landmark Union Trust Bank.
`` Additionally, he was a very close personal friend for more than 25 years,`` Craig said.
Before joining Union Trust National Bank in 1960, he was an account executive and representative of several nationally known brokerage firms locally and in Baltimore and Kansas City, Kan., where he was with Merrill Lynch. He retired in 1979.
A native of Baltimore, he came here in 1956 from Meridian, Miss., where he also was a broker. He was a graduate of the University of Maryland, College Park, Md.
He was former chairman of the Trust Investment Committee of the Florida Bankers Association and had taught bank investment courses at the American Institute of Bankers in St. Petersburg.
He was a member of St. Peter's Episcopal Cathedral and a former member of the St. Petersburg Yacht Club and Lakewood Country Club.
During World War II, he served as a captain in the Army Air Forces.
Survivors include his wife, Elizabeth ``Libby``; a daughter, Jodi S. Borowsky, Vienna, Va.; and three grandchildren.
Friends may call from 2 to 4 p.m. Monday at Kenfield-Woodlawn Funeral Home, 200 Pasadena Ave. S, where a funeral will be held at 1 p.m. Tuesday, with the Rev. Walter Cawthorne officiating.
Burial will follow in Woodlawn-Memory Gardens Cemetery.
Continuing problems seen stalling Texas banking
AUSTIN -- Continuing problems in the Texas banking industry probably will keep the state's financial institutions out of the lucrative and expanding global banking arena, a UT-Austin study concludes.
Dr. Carol T. F. Bennett says the "lackluster Texas economy and problems in the banking industry itself have led to the industry's disintegration."
And, she adds, "Whether Texas will ever reclaim a significant independence for its financial institutions is highly uncertain."
Bennett, who earned a Ph.D. in economics from UT-Austin and currently works for Price Waterhouse, says Texas financial institutions have been more vulnerable than those of other states for several reasons:
* Depressed oil markets since 1986.
* Bad real estate loans in 1983-85.
* Texas' ban, until 1987, on branch banking, which Bennett says increased the number of banks and the cost of regulation.
"Ironically," she says, "the law that was designed to keep banking in local communities had the effect of driving it out of state."
* Savings and loan deregulation, which allowed thrifts to branch more easily and to grow faster than banks.
* Disparity between the ease of entry into the industry and difficulty in finding "a graceful way to exit."
* Fraud, which Bennett calls the "flip side of Texas optimism."
"The statistics are indisputable," she writes.
"Of the nearly 1,000 banks that have failed since 1982, 333 are in Texas.
"Of the $21.6 billion of Federal Deposit Insurance Corporation cash assistance required from 1984 through 1988, more than $9 billion has been spent on Texas banks."
In addition, Bennett says, seven of the 10-largest Texas financial institutions in 1980 have since been sold to out-of-state investors, and two of the remaining three have been assisted by the FDIC.
Because of the difficulty in solving the crisis, as well as continuing problems, Bennett believes Texas "is likely to miss the anticipated trend in world banking."
Not only is Texas in an uncompetitive position, she says, but "several complex regulatory and judicial issues" remain to be solved, including how the FDIC will compensate bondholders of insolvent holding companies, whether new capital requirements for savings and loan associations will allow them to compete in the future, and whether "the new perceptions of junk bonds and leveraged buyouts will favor banks as a traditional alternative to financing."
"In the context of worldwide banking, where nine of the 10 largest banks are Japanese, what should have happened in the United States was a consolidation of financial services, not a splintering of them," Bennett says.
Such a consolidation eventually will occur in the U.S. because of the economy of scale, she believes.
"It is unfortunate that Texas-owned banks, at least for the immediate future, have missed the opportunity to compete in this worldwide arena," Bennett says.
Dr. Carol T. F. Bennett says the "lackluster Texas economy and problems in the banking industry itself have led to the industry's disintegration."
And, she adds, "Whether Texas will ever reclaim a significant independence for its financial institutions is highly uncertain."
Bennett, who earned a Ph.D. in economics from UT-Austin and currently works for Price Waterhouse, says Texas financial institutions have been more vulnerable than those of other states for several reasons:
* Depressed oil markets since 1986.
* Bad real estate loans in 1983-85.
* Texas' ban, until 1987, on branch banking, which Bennett says increased the number of banks and the cost of regulation.
"Ironically," she says, "the law that was designed to keep banking in local communities had the effect of driving it out of state."
* Savings and loan deregulation, which allowed thrifts to branch more easily and to grow faster than banks.
* Disparity between the ease of entry into the industry and difficulty in finding "a graceful way to exit."
* Fraud, which Bennett calls the "flip side of Texas optimism."
"The statistics are indisputable," she writes.
"Of the nearly 1,000 banks that have failed since 1982, 333 are in Texas.
"Of the $21.6 billion of Federal Deposit Insurance Corporation cash assistance required from 1984 through 1988, more than $9 billion has been spent on Texas banks."
In addition, Bennett says, seven of the 10-largest Texas financial institutions in 1980 have since been sold to out-of-state investors, and two of the remaining three have been assisted by the FDIC.
Because of the difficulty in solving the crisis, as well as continuing problems, Bennett believes Texas "is likely to miss the anticipated trend in world banking."
Not only is Texas in an uncompetitive position, she says, but "several complex regulatory and judicial issues" remain to be solved, including how the FDIC will compensate bondholders of insolvent holding companies, whether new capital requirements for savings and loan associations will allow them to compete in the future, and whether "the new perceptions of junk bonds and leveraged buyouts will favor banks as a traditional alternative to financing."
"In the context of worldwide banking, where nine of the 10 largest banks are Japanese, what should have happened in the United States was a consolidation of financial services, not a splintering of them," Bennett says.
Such a consolidation eventually will occur in the U.S. because of the economy of scale, she believes.
"It is unfortunate that Texas-owned banks, at least for the immediate future, have missed the opportunity to compete in this worldwide arena," Bennett says.
BROKERAGES CONFIDENT ABOUT '90S
Despite turmoil and change, Richmond-based brokerages say they are confident that stock investments will see a resurgence in the 1990s, and that the recent shakeout among investment firms will only strengthen the industry.
Stockbrokers are confident by nature, but their predictions at the end of 1989 seemingly are much cheerier than the ones they've been making in the past two years.
That's probably because the 1980s -- a decade marked by disappointments and upheaval in a business already known for its ups and downs -- are ending.
For starters, Black Monday -- Oct. 18, 1987 -- caused brokerages to pare staffs and threw a scare into individual investors worried about the safety of their nest eggs.
The one-day plunge of 508 points spurred an unprecedented wave of consolidations as the smaller, more vulnerable firms looked to the big players for security and capital reserves.
Even the nation's largest brokerages saw advantages in merging. In the largest acquisition in investment banking history, Shearson Lehman Bros. of New York bought E.F. Hutton & Co. for $1 billion in December 1987. The combined company, Shearson Lehman Hutton Inc., has a downtown Richmond office.
More recently, Richmond-based Scott & Stringfellow Financial Inc. acquired Investment Corporation of Virginia in Norfolk for about $2 million. The combination created a 400-employee firm, Scott Stringfellow Investment Corp.
In some senses, the weakening in the industry that took place in the late 1980s created opportunities which had never existed before, said Walter R.
Anderson, retail manager for Scott & Stringfellow.
The competition is actually shrinking, he said, as some of the weak firms drop out and even more undergo mergers to stay alive.
"You've seen a contraction in the industry," Anderson said. In 1989, there were about 250 fewer brokerage firms than in the previous year, he said.
"We look on this environment as an opportunity to grow."
With the completion of the merger, Scott & Stringfellow has 22 offices in Virginia and North Carolina. "We want to continue to become better known in North Carolina," Anderson said. "We only been there two years."
And the firm's expansion plans aren't confined to Virginia and North Carolina.
"We're not out aggressively looking for new territories . . . but we'll consider it if its a good fit for Scott & Stringfellow," he said.
Profits at the firm are up about 40 percent this year, making a significant leap from 1988s lagging levels. The company's third quarter was an example of this year's performance.
As of Sept. 30, the regional brokerage reported net income for the quarter at $379,601, up from $271,523, and profit per share increased to 21 cents from 15 cents. Scott & Stringfellow's gross revenue for the quarter rose 14 percent to $7.6 million from $6.7 million.
"We had a terrific end of the year, so (the percentage increase for 1989) won't be any less than that," Anderson said.
Other local brokerages reported similar results.
Charles A. Mills, vice president of Anderson & Strudwick Inc., said, "We had a very good year. Revenues were up 30 percent, even though we had 10 percent fewer people."
After the crash in 1987, brokerages across the county trimmed their sales staffs by about 10 percent. Most firms, like Anderson & Strudwick, haven't yet replaced those employees.
This year, Mills said, his firm was able to make up for some of the losses suffered in 1988. "People are slowly, nonetheless deliberately, beginning to buy stocks again," he said.
Stockbrokers are confident by nature, but their predictions at the end of 1989 seemingly are much cheerier than the ones they've been making in the past two years.
That's probably because the 1980s -- a decade marked by disappointments and upheaval in a business already known for its ups and downs -- are ending.
For starters, Black Monday -- Oct. 18, 1987 -- caused brokerages to pare staffs and threw a scare into individual investors worried about the safety of their nest eggs.
The one-day plunge of 508 points spurred an unprecedented wave of consolidations as the smaller, more vulnerable firms looked to the big players for security and capital reserves.
Even the nation's largest brokerages saw advantages in merging. In the largest acquisition in investment banking history, Shearson Lehman Bros. of New York bought E.F. Hutton & Co. for $1 billion in December 1987. The combined company, Shearson Lehman Hutton Inc., has a downtown Richmond office.
More recently, Richmond-based Scott & Stringfellow Financial Inc. acquired Investment Corporation of Virginia in Norfolk for about $2 million. The combination created a 400-employee firm, Scott Stringfellow Investment Corp.
In some senses, the weakening in the industry that took place in the late 1980s created opportunities which had never existed before, said Walter R.
Anderson, retail manager for Scott & Stringfellow.
The competition is actually shrinking, he said, as some of the weak firms drop out and even more undergo mergers to stay alive.
"You've seen a contraction in the industry," Anderson said. In 1989, there were about 250 fewer brokerage firms than in the previous year, he said.
"We look on this environment as an opportunity to grow."
With the completion of the merger, Scott & Stringfellow has 22 offices in Virginia and North Carolina. "We want to continue to become better known in North Carolina," Anderson said. "We only been there two years."
And the firm's expansion plans aren't confined to Virginia and North Carolina.
"We're not out aggressively looking for new territories . . . but we'll consider it if its a good fit for Scott & Stringfellow," he said.
Profits at the firm are up about 40 percent this year, making a significant leap from 1988s lagging levels. The company's third quarter was an example of this year's performance.
As of Sept. 30, the regional brokerage reported net income for the quarter at $379,601, up from $271,523, and profit per share increased to 21 cents from 15 cents. Scott & Stringfellow's gross revenue for the quarter rose 14 percent to $7.6 million from $6.7 million.
"We had a terrific end of the year, so (the percentage increase for 1989) won't be any less than that," Anderson said.
Other local brokerages reported similar results.
Charles A. Mills, vice president of Anderson & Strudwick Inc., said, "We had a very good year. Revenues were up 30 percent, even though we had 10 percent fewer people."
After the crash in 1987, brokerages across the county trimmed their sales staffs by about 10 percent. Most firms, like Anderson & Strudwick, haven't yet replaced those employees.
This year, Mills said, his firm was able to make up for some of the losses suffered in 1988. "People are slowly, nonetheless deliberately, beginning to buy stocks again," he said.
Wednesday, January 19, 2011
The 80's Change embroiled banking in '80s
It's the eve of the '90s. Do you know which bank you're with? Many people lost track during the 1980s as banks seemed to change partners more often than swingers at a New Year's Eve party.
Deregulation of the financial services industry and the elimination of many interstate banking barriers touched off an explosion of mergers and acquisitions that changed the face of banking.
Many small banks disappeared or were gobbled up by larger ones. And a new term was coined, the superregional bank, to describe the big banking companies that crossed state lines to expand their business.
Rhode Island's representative among the giants started the decade as Industrial National Bank, later changed its name to Fleet Financial and then took over banks in Maine and Connecticut.
Fleet took its boldest step in 1988 when it merged with Norstar Bancorp., in New York, to form Fleet/Norstar Financial Group. By the end of the decade it had grown into the country's 19th largest banking company.
"Who could have ever forecast the changes of the last decade?" asked Herbert W. Cummings, president of Citizens Bank.
"Who could have foreseen that the world would change as rapidly as it did."
His bank, like many other mutual savings banks in New England, took advantage of the bullish market and investors' interest in bank stocks in the mid-1980s and converted to public ownership.
Later, Citizens said it needed a bigger partner with deeper pockets to compete and sold out to the Royal Bank of Scotland, the first foreign owner of a southern New England bank. Citizens started the decade as a small, local bank and ended the '80s as the American arm of a global, $45.3 billion financial services company.
The catalyst for all the change was deregulation of the financial services industry, a move that gave banking companies more powers to compete toe to toe in a more wide-open market.
The "New England Compact" allowed banks in the six-state region to cross lines to acquire other banks. And nationwide, the removal of the cap that financial institutions could pay on interest rates set off a scramble for depositors' money.
The changed rules of the game squeezed profit margins between what banks paid out for deposits and what they took in from loans. And in the new competition in New England's already-crowded market, many banks either took over others or were taken over themselves.
Rhode Island Hospital Trust National Bank first acquired Columbus National Bank, then was taken over by Bank of Boston Corp., the largest banking company in New England.
Old Colony/Newport National became part of Bank of New England Corp. and People's Bank became the Rhode Island affiliate of Shawmut National Corp.
The new competition also unleashed a blizzard of new products as the banking companies fought for market share. Consumers were deluged with offers for certificates of deposits, checking accounts, money market accounts, student loans, and equity loans among others.
Deregulation of the financial services industry and the elimination of many interstate banking barriers touched off an explosion of mergers and acquisitions that changed the face of banking.
Many small banks disappeared or were gobbled up by larger ones. And a new term was coined, the superregional bank, to describe the big banking companies that crossed state lines to expand their business.
Rhode Island's representative among the giants started the decade as Industrial National Bank, later changed its name to Fleet Financial and then took over banks in Maine and Connecticut.
Fleet took its boldest step in 1988 when it merged with Norstar Bancorp., in New York, to form Fleet/Norstar Financial Group. By the end of the decade it had grown into the country's 19th largest banking company.
"Who could have ever forecast the changes of the last decade?" asked Herbert W. Cummings, president of Citizens Bank.
"Who could have foreseen that the world would change as rapidly as it did."
His bank, like many other mutual savings banks in New England, took advantage of the bullish market and investors' interest in bank stocks in the mid-1980s and converted to public ownership.
Later, Citizens said it needed a bigger partner with deeper pockets to compete and sold out to the Royal Bank of Scotland, the first foreign owner of a southern New England bank. Citizens started the decade as a small, local bank and ended the '80s as the American arm of a global, $45.3 billion financial services company.
The catalyst for all the change was deregulation of the financial services industry, a move that gave banking companies more powers to compete toe to toe in a more wide-open market.
The "New England Compact" allowed banks in the six-state region to cross lines to acquire other banks. And nationwide, the removal of the cap that financial institutions could pay on interest rates set off a scramble for depositors' money.
The changed rules of the game squeezed profit margins between what banks paid out for deposits and what they took in from loans. And in the new competition in New England's already-crowded market, many banks either took over others or were taken over themselves.
Rhode Island Hospital Trust National Bank first acquired Columbus National Bank, then was taken over by Bank of Boston Corp., the largest banking company in New England.
Old Colony/Newport National became part of Bank of New England Corp. and People's Bank became the Rhode Island affiliate of Shawmut National Corp.
The new competition also unleashed a blizzard of new products as the banking companies fought for market share. Consumers were deluged with offers for certificates of deposits, checking accounts, money market accounts, student loans, and equity loans among others.
Change Embroiled Banking in '80s
It's the eve of the `90s. Do you know which bank you're with? Many people lost track during the 1980s as banks seemed to change partners more often than swingers at a New Year's Eve party.
Deregulation of the financial services industry and the elimination of many interstate banking barriers touched off an explosion of mergers and acquisitions that changed the face of banking.
Many small banks disappeared or were gobbled up by larger ones. And a new term was coined, the superregional bank, to describe the big banking companies that crossed state lines to expand their business.
Rhode Island's representative among the giants started the decade as Industrial National Bank, later changed its name to Fleet Financial and then took over banks in Maine and Connecticut.
Fleet took its boldest step in 1988 when it merged with Norstar Bancorp., in New York, to form Fleet/Norstar Financial Group. By the end of the decade it had grown into the country's 19th largest banking company.
"Who could have ever forecast the changes of the last decade?" asked Herbert W. Cummings, president of Citizens Bank.
"Who could have foreseen that the world would change as rapidly as it did."
His bank, like many other mutual savings banks in New England, took advantage of the bullish market and investors' interest in bank stocks in the mid-1980s and converted to public ownership.
Later, Citizens said it needed a bigger partner with deeper pockets to compete and sold out to the Royal Bank of Scotland, the first foreign owner of a southern New England bank. Citizens started the decade as a small, local bank and ended the `80s as the American arm of a global, $45.3 billion financial services company.
The catalyst for all the change was deregulation of the financial services industry, a move that gave banking companies more powers to compete toe to toe in a more wideopen market.
The "New England Compact" allowed banks in the six-state region to cross lines to acquire other banks. And nationwide, the removal of the cap that financial institutions could pay on interest rates set off a scramble for depositors' money.
The changed rules of the game squeezed profit margins between what banks paid out for deposits and what they took in from loans. And in the new competition in New England's already-crowded market, many banks either took over others or were taken over themselves.
Rhode Island Hospital Trust National Bank first acquired Columbus National Bank, then was taken over by Bank of Boston Corp., the largest banking company in New England.
Old Colony/Newport National became part of Bank of New England Corp. and People's Bank became the Rhode Island affiliate of Shawmut National Corp.
The new competition also unleashed a blizzard of new products as the banking companies fought for market share. Consumers were deluged with offers for certificates of deposits, checking accounts, money market accounts, student loans, and equity loans among others.
And the ubiquitous ATM joined the lexicon to describe the machines that spit out money when you inserted a plastic card.
Banks installed automatic teller machines to cut overhead on personnel and make banking services available 24 hours a day to meet the changing lifestyles of busy consumers.
One product battle the big banks lost was breaking down the barrier of the 54-year-old Glass-Steagall Act to allow them to underwrite securities, sell insurance and better compete with other financial services companies and the big foreign banks. Although beaten back by Congress several times, the big banks readied to break through in the 1990s.
While many banks got bigger, the small banks that survived tried to slice out a niche in the market for themselves by selling personal service they said was lost when the big banks lost touch with their communities.
Deregulation of the financial services industry and the elimination of many interstate banking barriers touched off an explosion of mergers and acquisitions that changed the face of banking.
Many small banks disappeared or were gobbled up by larger ones. And a new term was coined, the superregional bank, to describe the big banking companies that crossed state lines to expand their business.
Rhode Island's representative among the giants started the decade as Industrial National Bank, later changed its name to Fleet Financial and then took over banks in Maine and Connecticut.
Fleet took its boldest step in 1988 when it merged with Norstar Bancorp., in New York, to form Fleet/Norstar Financial Group. By the end of the decade it had grown into the country's 19th largest banking company.
"Who could have ever forecast the changes of the last decade?" asked Herbert W. Cummings, president of Citizens Bank.
"Who could have foreseen that the world would change as rapidly as it did."
His bank, like many other mutual savings banks in New England, took advantage of the bullish market and investors' interest in bank stocks in the mid-1980s and converted to public ownership.
Later, Citizens said it needed a bigger partner with deeper pockets to compete and sold out to the Royal Bank of Scotland, the first foreign owner of a southern New England bank. Citizens started the decade as a small, local bank and ended the `80s as the American arm of a global, $45.3 billion financial services company.
The catalyst for all the change was deregulation of the financial services industry, a move that gave banking companies more powers to compete toe to toe in a more wideopen market.
The "New England Compact" allowed banks in the six-state region to cross lines to acquire other banks. And nationwide, the removal of the cap that financial institutions could pay on interest rates set off a scramble for depositors' money.
The changed rules of the game squeezed profit margins between what banks paid out for deposits and what they took in from loans. And in the new competition in New England's already-crowded market, many banks either took over others or were taken over themselves.
Rhode Island Hospital Trust National Bank first acquired Columbus National Bank, then was taken over by Bank of Boston Corp., the largest banking company in New England.
Old Colony/Newport National became part of Bank of New England Corp. and People's Bank became the Rhode Island affiliate of Shawmut National Corp.
The new competition also unleashed a blizzard of new products as the banking companies fought for market share. Consumers were deluged with offers for certificates of deposits, checking accounts, money market accounts, student loans, and equity loans among others.
And the ubiquitous ATM joined the lexicon to describe the machines that spit out money when you inserted a plastic card.
Banks installed automatic teller machines to cut overhead on personnel and make banking services available 24 hours a day to meet the changing lifestyles of busy consumers.
One product battle the big banks lost was breaking down the barrier of the 54-year-old Glass-Steagall Act to allow them to underwrite securities, sell insurance and better compete with other financial services companies and the big foreign banks. Although beaten back by Congress several times, the big banks readied to break through in the 1990s.
While many banks got bigger, the small banks that survived tried to slice out a niche in the market for themselves by selling personal service they said was lost when the big banks lost touch with their communities.
KIDSDAY 1989 All Wrapped Up
BANKING FOR KIDS By Evan Schectman Kidsday Staff Reporter
In this high tech world, kids want to buy anything that is new. Unfortunately, it seems that everything we want is more expensive than ever. It's discouraging for kids because pennies and dimes won't buy much.
Many banks now allow kids to start a bank account with as little as $2. But frankly at 5.5 per cent interest, you need a little more. Dollar Dry Bank has started a school banking program. They interview your school, and if they choose you, you can deposit your savings once a week with their bank. The program enables students to make deposits, record them on an in-school computer and the best part is you receive a monthly statement.
You need the assistance of your PTA, as they must carry the deposits to the local bank. For information call Robert Edwards at Dry Dock Savings Bank at (914) 397-2000.this is test type for special best of kidsday issue send type to ADOPT A GRANDPARENT By Sandra Sainbert, Danielle Hurdle, Wendy Wynter and Andrea Roberson Kidsday Staff Reporters
The kids in our class decided it would be special to adopt some elderly people at the A. Holly Patterson Home for Adults in Uniondale.
We discovered that elderly people are just like us, just older. For many of us, it was like adopting another grandparent. We discovered some could ride bikes and walk as fast as we could.
Many people in these senior citizen homes are sometimes forgotten by their own families. It was really sad to discover this. We are so busy on most days, it is hard to imagine that there are people with absolutely nothing to do. Just a visit can make someone's day. We ran errands and did small chores as well as just sitting and talking with them. They enjoyed our corny jokes and let us know they appreciated our efforts in many ways.
It's easy to adopt a grandparent. Have your teacher or club leader go to a nearby community center or home for adults like the A. Holly Patterson Home. If they don't want to make it a class effort, go to the home yourself with several of your friends. We bet there are many elderly people waiting to be loved by you.
TEEN SUICIDE By Dean Koradalis and Tommy Crawford Kidsday Staff Reporters
Early last year USA Today pronted their survey which stated that one out of seven kids thought about suicide. People magazine reported several years ago that one-half million kids have thought about it.
It reported that while it is normal for teenagers to be occasionaly depressed when they stay depressed for weeks it is a cry for help.
Some reasons given were not being able to get along with parents, not living up to others' expectations, loneliness, romance problems an appearance. Here are some warning signs:
1. Change in eating habits. 2. Don't care about school. 3. Preoccupation with ideas of death. 4. Giving away prized possessions. 5. Change in sleeping habits. 6. Withdrawal from friends or family. 7. Personality changes. 8. Use of drugs or alcohol. 9. Recent suicide of friend or relative. 10. Previous suicide attempts. 11. Stays in room constantly.
Suicide does not usually happen without warning. A suicidal person gives many clues and warnings regarding his or her intentions.
Studies of hundreds of genuine suicide notes indicate that although suicidal persons are extremely unhappy, they are not necessarily mentally ill.
In this high tech world, kids want to buy anything that is new. Unfortunately, it seems that everything we want is more expensive than ever. It's discouraging for kids because pennies and dimes won't buy much.
Many banks now allow kids to start a bank account with as little as $2. But frankly at 5.5 per cent interest, you need a little more. Dollar Dry Bank has started a school banking program. They interview your school, and if they choose you, you can deposit your savings once a week with their bank. The program enables students to make deposits, record them on an in-school computer and the best part is you receive a monthly statement.
You need the assistance of your PTA, as they must carry the deposits to the local bank. For information call Robert Edwards at Dry Dock Savings Bank at (914) 397-2000.this is test type for special best of kidsday issue send type to ADOPT A GRANDPARENT By Sandra Sainbert, Danielle Hurdle, Wendy Wynter and Andrea Roberson Kidsday Staff Reporters
The kids in our class decided it would be special to adopt some elderly people at the A. Holly Patterson Home for Adults in Uniondale.
We discovered that elderly people are just like us, just older. For many of us, it was like adopting another grandparent. We discovered some could ride bikes and walk as fast as we could.
Many people in these senior citizen homes are sometimes forgotten by their own families. It was really sad to discover this. We are so busy on most days, it is hard to imagine that there are people with absolutely nothing to do. Just a visit can make someone's day. We ran errands and did small chores as well as just sitting and talking with them. They enjoyed our corny jokes and let us know they appreciated our efforts in many ways.
It's easy to adopt a grandparent. Have your teacher or club leader go to a nearby community center or home for adults like the A. Holly Patterson Home. If they don't want to make it a class effort, go to the home yourself with several of your friends. We bet there are many elderly people waiting to be loved by you.
TEEN SUICIDE By Dean Koradalis and Tommy Crawford Kidsday Staff Reporters
Early last year USA Today pronted their survey which stated that one out of seven kids thought about suicide. People magazine reported several years ago that one-half million kids have thought about it.
It reported that while it is normal for teenagers to be occasionaly depressed when they stay depressed for weeks it is a cry for help.
Some reasons given were not being able to get along with parents, not living up to others' expectations, loneliness, romance problems an appearance. Here are some warning signs:
1. Change in eating habits. 2. Don't care about school. 3. Preoccupation with ideas of death. 4. Giving away prized possessions. 5. Change in sleeping habits. 6. Withdrawal from friends or family. 7. Personality changes. 8. Use of drugs or alcohol. 9. Recent suicide of friend or relative. 10. Previous suicide attempts. 11. Stays in room constantly.
Suicide does not usually happen without warning. A suicidal person gives many clues and warnings regarding his or her intentions.
Studies of hundreds of genuine suicide notes indicate that although suicidal persons are extremely unhappy, they are not necessarily mentally ill.
Tuesday, January 18, 2011
Wall Street Prepares For a Failure Boom
LEAD: AS the Hillsborough Holdings Corporation prepared its filing for bankruptcy last week, it became the darling of Wall Street. A parade of investment bankers, having sniffed out the fact that the highly leveraged company, formed in 1987 by Kohlberg, Kravis, Roberts & Company, was planning to file for protection from its creditors, came peddling their skills at reorganization.
AS the Hillsborough Holdings Corporation prepared its filing for bankruptcy last week, it became the darling of Wall Street. A parade of investment bankers, having sniffed out the fact that the highly leveraged company, formed in 1987 by Kohlberg, Kravis, Roberts & Company, was planning to file for protection from its creditors, came peddling their skills at reorganization.
''As news leaked out about Hillsborough, we got calls from four investment banking firms who wanted to help out,'' said Richard I. Beattie, a partner at Simpson, Thatcher & Bartlett who works with Kohlberg, Kravis.
The flurry of interest is indicative of the newest chase on Wall Street. With highly leveraged deals like the recent purchases of Resorts International and Federated Department Stores now coming unraveled, large investment banks and law firms see the makings of what may be a profitable business in the 90's: saving companies that are drowning in debt. ''Failure is a growth business,'' said one investment banker, summing up Wall Street's new attitude.
Most firms are now scrambling to become experts in the field. Major brokerage houses, including First Boston, Shearson and Drexel, are dedicating more resources to reorganizations and restructurings, setting off bidding wars for bankruptcy specialists. And many are talking about putting up the money to buy the debt of companies on the brink of bankruptcy, an activity that could provide new opportunities for merchant bankers who have seen other parts of their business fizzle.
Likewise, securities law firms with specialties in bankruptcy, like Weil, Gotshal & Manges; Fried, Frank, Harris, Shriver & Jacobson, and Wachtell, Lipton, Rosen & Katz, are bracing for a flurry of new business. ''In the past nine months, we have been busier than we have ever been,'' said Michael Cook, the partner in charge of the bankruptcy practice at Skadden, Arps, Slate, Meagher & Flom. ''I think a lot more business is coming down the road.''
Paradoxically, many of these investment banks and law firms are preparing to earn huge fees over the next few years correcting the mistakes they helped make in the fast-paced, fast-money dealmaking days of the 80's. And few on Wall Street find the concept odd. In their view, they merely act as architects for corporate chiefs who come to them with master plans. ''Wall Street survives not on the periods of ups or downs, it survives on volatility,'' said one investment banker. ''As long as people need financial engineering, Wall Street will be involved and will be making money as a result.''
In reality, making a profit by undoing its own deeds is a rich Wall Street tradition. These bankruptcy chasers, after all, are feeding off of a phenomenon they helped set in motion two decades ago. In the late 1960's, corporate boardrooms were haunted by the so-called conglomerateurs. Convinced that bigger was better, these empire builders thrived on acquisitions that were structured and financed by Wall Street brokerages. In the 1980's, when the idea of an efficient conglomerate was finally debunked, Wall Street helped takeover mavericks buy and break up the companies it helped build. And now, it is starting to repair the damage from its overzealous use of debt in those deals earlier in the decade.
AS the Hillsborough Holdings Corporation prepared its filing for bankruptcy last week, it became the darling of Wall Street. A parade of investment bankers, having sniffed out the fact that the highly leveraged company, formed in 1987 by Kohlberg, Kravis, Roberts & Company, was planning to file for protection from its creditors, came peddling their skills at reorganization.
''As news leaked out about Hillsborough, we got calls from four investment banking firms who wanted to help out,'' said Richard I. Beattie, a partner at Simpson, Thatcher & Bartlett who works with Kohlberg, Kravis.
The flurry of interest is indicative of the newest chase on Wall Street. With highly leveraged deals like the recent purchases of Resorts International and Federated Department Stores now coming unraveled, large investment banks and law firms see the makings of what may be a profitable business in the 90's: saving companies that are drowning in debt. ''Failure is a growth business,'' said one investment banker, summing up Wall Street's new attitude.
Most firms are now scrambling to become experts in the field. Major brokerage houses, including First Boston, Shearson and Drexel, are dedicating more resources to reorganizations and restructurings, setting off bidding wars for bankruptcy specialists. And many are talking about putting up the money to buy the debt of companies on the brink of bankruptcy, an activity that could provide new opportunities for merchant bankers who have seen other parts of their business fizzle.
Likewise, securities law firms with specialties in bankruptcy, like Weil, Gotshal & Manges; Fried, Frank, Harris, Shriver & Jacobson, and Wachtell, Lipton, Rosen & Katz, are bracing for a flurry of new business. ''In the past nine months, we have been busier than we have ever been,'' said Michael Cook, the partner in charge of the bankruptcy practice at Skadden, Arps, Slate, Meagher & Flom. ''I think a lot more business is coming down the road.''
Paradoxically, many of these investment banks and law firms are preparing to earn huge fees over the next few years correcting the mistakes they helped make in the fast-paced, fast-money dealmaking days of the 80's. And few on Wall Street find the concept odd. In their view, they merely act as architects for corporate chiefs who come to them with master plans. ''Wall Street survives not on the periods of ups or downs, it survives on volatility,'' said one investment banker. ''As long as people need financial engineering, Wall Street will be involved and will be making money as a result.''
In reality, making a profit by undoing its own deeds is a rich Wall Street tradition. These bankruptcy chasers, after all, are feeding off of a phenomenon they helped set in motion two decades ago. In the late 1960's, corporate boardrooms were haunted by the so-called conglomerateurs. Convinced that bigger was better, these empire builders thrived on acquisitions that were structured and financed by Wall Street brokerages. In the 1980's, when the idea of an efficient conglomerate was finally debunked, Wall Street helped takeover mavericks buy and break up the companies it helped build. And now, it is starting to repair the damage from its overzealous use of debt in those deals earlier in the decade.
Banking's High-Tech Retail Chase
LEAD: IN the battle among banks for retail customers, the victors are likely to be those that use high technology best. So banks are now spending more than $10 billion a year on electronic technology to attract more customers, serve them more efficiently and keep staffs free to sell more profitable products.
IN the battle among banks for retail customers, the victors are likely to be those that use high technology best. So banks are now spending more than $10 billion a year on electronic technology to attract more customers, serve them more efficiently and keep staffs free to sell more profitable products.
The contest is evident everywhere. Customers of the People's Bank of Bridgeport, Conn., can call from auto showrooms to arrange a loan in as little as 15 minutes. Chase Manhattan promotes its credit cards by listing 34 features, including a free worldwide message network and a legal services program. Teller machines of the National Bank of Commerce in Memphis dispense coupons redeemable for Campbell soups. When the Dollar Dry Dock Savings Bank of New York was raiding customers from a nearby Chemical Bank branch, Dollar Dry Dock teller machines were programmed to flash a reminder about free gifts every time a Chemical customer slipped in a card.
These skirmishes reflect the struggle to wring profits from retail banking and the extent to which innovative marketing will depend on technology. Automated teller machines, telephones and plastic cards are the weapons. Long gone are the days when banks could be content to pump out generic Visas and Mastercards. Now they are trying to become brand names in their own right.
The cashless society is still a long way off, but banks are hastening the day when going cash-less might be easier than going card-less. Twenty years ago, when Chemical Bank installed the nation's first automated teller machine, it was a primitive contraption that did nothing but dispense cash in $15 and $30 lots. Back then, BankAmericard, the forerunner of Visa, was a local program of the California-based Bank of America. And when a customer called a bank, another live person came on the line. Following Customers Everywhere
Now, a web of computers, telephones and plastic cards lets banks serve their customers wherever they travel and work. ''The credit cards allowed banks to follow their customers across state lines and provide banking services nationally, despite the antiquated branching laws,'' said D. Dale Browning, the president of Colorado National Bank. By giving customers instant loans at any store that accepts credit cards, banks created an industry that is now one of the most profitable parts of their business.
Teller machines now dispense cash down to the penny, accept deposits, transfer money and, in the newest models, help customers apply for mortgages and loans. Banking by phone handles everything from auto loan applications to bill-paying, all with beeps, tones and recordings.
Teller machines and telephone banking services have not generated the same profits as credit cards. But they are crucial for consumer banking, especially in large cities where competition is most intense. Both let banks cut costs and extend their reach far beyond their home states.
Automation and electronics can help limit the growth of costly bank branches, 40 percent of them money-losers. Branches will not disappear. But bankers want teller machines and telephone banking to free the branch staff for selling more profitable products like mutual funds.
Gradually, bank customers are learning to love teller machines, if not as much as bankers would like. Banks have fueled the romance by linking teller machines nationally. ''Customers for some time have come to assume that merchants - with some exceptions like grocery stores - will accept credit cards,'' said J. Paul Bouchelle, executive vice president at the First National Bank of Albuquerque, N.M. ''Now we are reaching a point with automated teller machines that when they see one, they are inclined to expect that they have a card that will let them get cash.''
IN the battle among banks for retail customers, the victors are likely to be those that use high technology best. So banks are now spending more than $10 billion a year on electronic technology to attract more customers, serve them more efficiently and keep staffs free to sell more profitable products.
The contest is evident everywhere. Customers of the People's Bank of Bridgeport, Conn., can call from auto showrooms to arrange a loan in as little as 15 minutes. Chase Manhattan promotes its credit cards by listing 34 features, including a free worldwide message network and a legal services program. Teller machines of the National Bank of Commerce in Memphis dispense coupons redeemable for Campbell soups. When the Dollar Dry Dock Savings Bank of New York was raiding customers from a nearby Chemical Bank branch, Dollar Dry Dock teller machines were programmed to flash a reminder about free gifts every time a Chemical customer slipped in a card.
These skirmishes reflect the struggle to wring profits from retail banking and the extent to which innovative marketing will depend on technology. Automated teller machines, telephones and plastic cards are the weapons. Long gone are the days when banks could be content to pump out generic Visas and Mastercards. Now they are trying to become brand names in their own right.
The cashless society is still a long way off, but banks are hastening the day when going cash-less might be easier than going card-less. Twenty years ago, when Chemical Bank installed the nation's first automated teller machine, it was a primitive contraption that did nothing but dispense cash in $15 and $30 lots. Back then, BankAmericard, the forerunner of Visa, was a local program of the California-based Bank of America. And when a customer called a bank, another live person came on the line. Following Customers Everywhere
Now, a web of computers, telephones and plastic cards lets banks serve their customers wherever they travel and work. ''The credit cards allowed banks to follow their customers across state lines and provide banking services nationally, despite the antiquated branching laws,'' said D. Dale Browning, the president of Colorado National Bank. By giving customers instant loans at any store that accepts credit cards, banks created an industry that is now one of the most profitable parts of their business.
Teller machines now dispense cash down to the penny, accept deposits, transfer money and, in the newest models, help customers apply for mortgages and loans. Banking by phone handles everything from auto loan applications to bill-paying, all with beeps, tones and recordings.
Teller machines and telephone banking services have not generated the same profits as credit cards. But they are crucial for consumer banking, especially in large cities where competition is most intense. Both let banks cut costs and extend their reach far beyond their home states.
Automation and electronics can help limit the growth of costly bank branches, 40 percent of them money-losers. Branches will not disappear. But bankers want teller machines and telephone banking to free the branch staff for selling more profitable products like mutual funds.
Gradually, bank customers are learning to love teller machines, if not as much as bankers would like. Banks have fueled the romance by linking teller machines nationally. ''Customers for some time have come to assume that merchants - with some exceptions like grocery stores - will accept credit cards,'' said J. Paul Bouchelle, executive vice president at the First National Bank of Albuquerque, N.M. ''Now we are reaching a point with automated teller machines that when they see one, they are inclined to expect that they have a card that will let them get cash.''
Breaking into the '90s. A New World in Time. Walls fall, debts rise, politicians thrive, environments suffer-a look over the shoulder and over the horizon. When Debt Is Respectable the GOP Heads for Trouble
The most precarious legacy of the 1980s isn't resurgent greed but a larger threat-the related and unprecedented expansion of public and private debt, all dressed up in a cheery facade of responsible national policy-making.
Dangerously irresponsible may turn out to be a better description. The nation's resultant hangover, already being felt from California savings-and-loans to crumbling New England real estate, won't be resolved with a few spoonfuls of medicine. There's a worrisome chance that as the new decade unfolds the 1980s debt legacy could jeopardize the long and increasingly shaky U.S. business cycle teetering on financial dominoes, submerge the hoped-for "peace dividend" from Eastern Europe in a string of additional federal bailouts, further Japan's financial displacement of the United States and push this country back toward the uncertain political economics of Democrats and liberals.
In a rich political irony, the time has never been more ripe for someone on the political right to commandeer Barry M. Goldwater's 30-year-old title, "Conscience of a Conservative," for an indictment of relentless 1980s conservative willingness to scuttle past philosophies of fiscal responsibility. As deficits and debt became convenient-to pay for Japanese imports, perpetuate federal tax-rate cuts or pump up Wall Street's leveraged buyouts-top Republicans from former Treasury Secretary Donald T. Regan to economic theorist Milton Friedman began saying indebtedness wasn't a problem after all. From 1980 to 1989, as they talked, the U.S. national debt tripled from $900 billion to $2.8 trillion.
Some supply-siders actually expressed enthusiasm over debt as a sign of strength. Far from being a problem, America's ballooning international indebtedness of the late 1980s simply proved how anxious foreigners were to invest here. And mushrooming corporate debt wasn't a danger, either. On the contrary, managers of unleveraged companies were faulted for making insufficient use of their assets.
Embraced by many conservative politicians and members of the financial community, debt became respectable and even started leading the church choir. By 1989, corporate, consumer and mortgage debt was at record levels and financiers had pioneered an incredible new array of instruments to refinance everything from boats to recreational vehicles.
Few liberals-politically accustomed to debt and deficits since the New Deal-ventured to stand in the way. But the critical weakness was GOP willingness to abandon a half century of opposition in order to embrace supply-side and monetarist economic cure-alls and then rampant use of debt for speculation. This "economic engineering" of the 1980s may well be courting a failure akin to that of 1960s liberal "social engineering."
Dangerously irresponsible may turn out to be a better description. The nation's resultant hangover, already being felt from California savings-and-loans to crumbling New England real estate, won't be resolved with a few spoonfuls of medicine. There's a worrisome chance that as the new decade unfolds the 1980s debt legacy could jeopardize the long and increasingly shaky U.S. business cycle teetering on financial dominoes, submerge the hoped-for "peace dividend" from Eastern Europe in a string of additional federal bailouts, further Japan's financial displacement of the United States and push this country back toward the uncertain political economics of Democrats and liberals.
In a rich political irony, the time has never been more ripe for someone on the political right to commandeer Barry M. Goldwater's 30-year-old title, "Conscience of a Conservative," for an indictment of relentless 1980s conservative willingness to scuttle past philosophies of fiscal responsibility. As deficits and debt became convenient-to pay for Japanese imports, perpetuate federal tax-rate cuts or pump up Wall Street's leveraged buyouts-top Republicans from former Treasury Secretary Donald T. Regan to economic theorist Milton Friedman began saying indebtedness wasn't a problem after all. From 1980 to 1989, as they talked, the U.S. national debt tripled from $900 billion to $2.8 trillion.
Some supply-siders actually expressed enthusiasm over debt as a sign of strength. Far from being a problem, America's ballooning international indebtedness of the late 1980s simply proved how anxious foreigners were to invest here. And mushrooming corporate debt wasn't a danger, either. On the contrary, managers of unleveraged companies were faulted for making insufficient use of their assets.
Embraced by many conservative politicians and members of the financial community, debt became respectable and even started leading the church choir. By 1989, corporate, consumer and mortgage debt was at record levels and financiers had pioneered an incredible new array of instruments to refinance everything from boats to recreational vehicles.
Few liberals-politically accustomed to debt and deficits since the New Deal-ventured to stand in the way. But the critical weakness was GOP willingness to abandon a half century of opposition in order to embrace supply-side and monetarist economic cure-alls and then rampant use of debt for speculation. This "economic engineering" of the 1980s may well be courting a failure akin to that of 1960s liberal "social engineering."
Monday, January 17, 2011
Arizona reels after '80s `binge
PHOENIX, Ariz. - Promoters of this desert city like to say it is located in the Valley of the Sun, but what is more apparent than the sunshine these days is the real estate and banking collapse of 1989 that has left its ugly mark all over town.
Once the embodiment of Sun Belt growth and prosperity, Phoenix, along with the entire state, has returned to a painful sobriety in recent months following an extended spree of development and speculation that extended all through the mid-1980s.
``Arizona has been on a binge,'' said Denver-based banking regulator Anthony Scalzi, ``a long one.' The binge has caused some nasty hangovers:
Property repossessions on defaulted loans are running into the billions of dollars and office buildings are begging for tenants. Real estate values have plunged on many properties, particularly on vacant land acquired for development.
Foreclosures have affected some of the state's best-known residents, including former Gov. Evan Mecham and former U.S. Senate candidate Keith DeGreen. Fallen business tycoon Gordon Hall just had his former mansion in suburban Phoenix, which has 53,000 square feet of room, sold at auction for less than $4 million, about 20 percent of its estimated replacement cost.
Middle-income homeowners have seen the value of single-family houses fall up to 10 percent in some Phoenix neighborhoods. Residential foreclosures in the Phoenix area have already surpassed 14,000 this year, up sharply over 1988.
Major lenders are flailing around in seas of red ink. Arizona financial institutions lost $741 million in value from July through September alone, according to state banking regulators.
``The fact is that bad decisions were made by everyone and all the lenders got into trouble,'' said James P. Simmons, chief executive of Valley National Bank, Arizona's largest independently owned financial institution.
Arizona represents a severe example of a real estate slowdown that is hopscotching around the country, touching down in places like New England, New Jersey and some coastal parts of California.
Once the embodiment of Sun Belt growth and prosperity, Phoenix, along with the entire state, has returned to a painful sobriety in recent months following an extended spree of development and speculation that extended all through the mid-1980s.
``Arizona has been on a binge,'' said Denver-based banking regulator Anthony Scalzi, ``a long one.' The binge has caused some nasty hangovers:
Property repossessions on defaulted loans are running into the billions of dollars and office buildings are begging for tenants. Real estate values have plunged on many properties, particularly on vacant land acquired for development.
Foreclosures have affected some of the state's best-known residents, including former Gov. Evan Mecham and former U.S. Senate candidate Keith DeGreen. Fallen business tycoon Gordon Hall just had his former mansion in suburban Phoenix, which has 53,000 square feet of room, sold at auction for less than $4 million, about 20 percent of its estimated replacement cost.
Middle-income homeowners have seen the value of single-family houses fall up to 10 percent in some Phoenix neighborhoods. Residential foreclosures in the Phoenix area have already surpassed 14,000 this year, up sharply over 1988.
Major lenders are flailing around in seas of red ink. Arizona financial institutions lost $741 million in value from July through September alone, according to state banking regulators.
``The fact is that bad decisions were made by everyone and all the lenders got into trouble,'' said James P. Simmons, chief executive of Valley National Bank, Arizona's largest independently owned financial institution.
Arizona represents a severe example of a real estate slowdown that is hopscotching around the country, touching down in places like New England, New Jersey and some coastal parts of California.
Work now could ease job challenges of '90s Employers, educators face need to produce new skills
The 1990s will be a time of challenge for workers, employers and educators in Illinois.
And the time to answer the challenge is now.
The decade of the '80s, in which employers could pick and choose in hiring, is over.
In the next decade, some 770,000 new workers will be needed in the state, adding to the current labor force of 6 million. But, for the first time in 25 years, the Illinois work force is shrinking.
Making sure that Illinois has people qualified to fill the new job openings is the No. 1 goal the state must meet. That challenge is not unique to Illinois, as the nation will be trying to do the same.
Employees as well as industry will have to be prepared for the continuing occupational shift to the providing of services-computer and data processing, medical, personnel and business services-and away from the familiar Illinois mainstays of manufacturing and agriculture.
By 1999, employment in manufacturing industries will shrink to about 17 percent of the state's work force, down from 25 percent in 1980. But the fact that such employment is on the decline doesn't mean that manufacturing is on its way out in Illinois. It means, rather, that firms are more capital-intensive and less labor-intensive. They are becoming automated.
That means workers will have to learn the technological skills required by a service-producing economy-and employers will have to train them.
According to the American Society for Training and Development, employers now spend $30 billion annually on the education of employees; $1 billion of that sum goes to teach basic literacy.
However, as the state enters the 1990s, that's not enough money to fill the need of workers to learn new and necessary skills.
"We're advising companies now to build education systems that support a transformation into the kind of corporation they'll need to be to cope with all the predicted changes," said Pat Galagan of the training society.
"The challenges companies will be asked to meet are competing in a global economy, a diverse work force, changing skill levels and the challenge of dealing with change itself. They will have to be flexible."
So will workers, because nearly two-thirds of all new jobs in Illinois will be in white-collar occupations in finance, real estate, insurance, banking, health care and retailing. These jobs require well-educated, computer-literate workers with good communications skills, and many in the projected labor pool don't fit that description.
Managing a diverse work force will be necessary, because the bulk of new hires are likely to be 35 years of age and over, a result of the "birth dearth," or low birth rate, which has reduced the traditional pool of entry-level workers ages 16 to 24.
And, for the first time, the American white male will be outnumbered in new jobs by women, minorities and immigrants.
The challenge for corporations will be to learn to manage and motivate a variety of people.
And the time to answer the challenge is now.
The decade of the '80s, in which employers could pick and choose in hiring, is over.
In the next decade, some 770,000 new workers will be needed in the state, adding to the current labor force of 6 million. But, for the first time in 25 years, the Illinois work force is shrinking.
Making sure that Illinois has people qualified to fill the new job openings is the No. 1 goal the state must meet. That challenge is not unique to Illinois, as the nation will be trying to do the same.
Employees as well as industry will have to be prepared for the continuing occupational shift to the providing of services-computer and data processing, medical, personnel and business services-and away from the familiar Illinois mainstays of manufacturing and agriculture.
By 1999, employment in manufacturing industries will shrink to about 17 percent of the state's work force, down from 25 percent in 1980. But the fact that such employment is on the decline doesn't mean that manufacturing is on its way out in Illinois. It means, rather, that firms are more capital-intensive and less labor-intensive. They are becoming automated.
That means workers will have to learn the technological skills required by a service-producing economy-and employers will have to train them.
According to the American Society for Training and Development, employers now spend $30 billion annually on the education of employees; $1 billion of that sum goes to teach basic literacy.
However, as the state enters the 1990s, that's not enough money to fill the need of workers to learn new and necessary skills.
"We're advising companies now to build education systems that support a transformation into the kind of corporation they'll need to be to cope with all the predicted changes," said Pat Galagan of the training society.
"The challenges companies will be asked to meet are competing in a global economy, a diverse work force, changing skill levels and the challenge of dealing with change itself. They will have to be flexible."
So will workers, because nearly two-thirds of all new jobs in Illinois will be in white-collar occupations in finance, real estate, insurance, banking, health care and retailing. These jobs require well-educated, computer-literate workers with good communications skills, and many in the projected labor pool don't fit that description.
Managing a diverse work force will be necessary, because the bulk of new hires are likely to be 35 years of age and over, a result of the "birth dearth," or low birth rate, which has reduced the traditional pool of entry-level workers ages 16 to 24.
And, for the first time, the American white male will be outnumbered in new jobs by women, minorities and immigrants.
The challenge for corporations will be to learn to manage and motivate a variety of people.
Texas bank crisis not over yet
This story is a composite of versions published in the various zones.
The darkest days of the Texas banking crisis appear to be at an end, but difficult times still lie ahead in 1990 and beyond for many banks as they struggle to compete in the state's weakened economy, analysts and regulators say.
Those few banks that have been recapitalized with federal assistance are likely to prosper next year, but many smaller banks will fail as the effects of an economic collapse that began in the mid-1980s linger, the experts said.
A record 134 banks went out of business in Texas in 1989-out of 203 bank failures nationwide-and another 70 to 90 will go under in 1990, said Steve Scurlock, deputy commissioner for the Texas Department of Banking.
"The state system has seen its darkest days. But there will not be a tremendous amount of sunlight next year or the year after that," Scurlock said.
Before the economic collapse, which started in the mid-1980s and greatly accelerated when oil prices fell to $10 a barrel in 1986, the state had about 1,900 banks.
Today, there are about 1,400, Scurlock said.
Concomitant with the decline in banks has been a fall in banking assets from $220 billion in 1986 to $180 billion today, he said.
That drop translates into diminished economic activity, Scurlock said. "When you have fewer assets, that obviously corresponds to fewer loans," he said.
Nine of the state's 10 largest banking firms have been recapitalized with federal assistance or merged with other banks.
The failures predicted to occur in the future will be smaller, independent banks for whom the Federal Deposit Insurance Corp.'s bailout program has been non-existent.
The darkest days of the Texas banking crisis appear to be at an end, but difficult times still lie ahead in 1990 and beyond for many banks as they struggle to compete in the state's weakened economy, analysts and regulators say.
Those few banks that have been recapitalized with federal assistance are likely to prosper next year, but many smaller banks will fail as the effects of an economic collapse that began in the mid-1980s linger, the experts said.
A record 134 banks went out of business in Texas in 1989-out of 203 bank failures nationwide-and another 70 to 90 will go under in 1990, said Steve Scurlock, deputy commissioner for the Texas Department of Banking.
"The state system has seen its darkest days. But there will not be a tremendous amount of sunlight next year or the year after that," Scurlock said.
Before the economic collapse, which started in the mid-1980s and greatly accelerated when oil prices fell to $10 a barrel in 1986, the state had about 1,900 banks.
Today, there are about 1,400, Scurlock said.
Concomitant with the decline in banks has been a fall in banking assets from $220 billion in 1986 to $180 billion today, he said.
That drop translates into diminished economic activity, Scurlock said. "When you have fewer assets, that obviously corresponds to fewer loans," he said.
Nine of the state's 10 largest banking firms have been recapitalized with federal assistance or merged with other banks.
The failures predicted to occur in the future will be smaller, independent banks for whom the Federal Deposit Insurance Corp.'s bailout program has been non-existent.
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