European Stars and Stripes (Newspaper) - September 17, 1989, Darmstadt, Hesse                                Page 18 the stars and stripes business news 2-mar/c level defies Dollar despite gains although . Trade figures released on Fri Day meant Good news for the Dollar it s not Good enough to Send americans to their local mar cd pcs Ilcyn dealer. The positive Trade data prob ably won t be enough to push the Dollar Over the 2-Mark level traders say. Traders fear heavy Central Bank intervention could be triggered by breaching the 2-Mark level said Petra Oil a Citibank economist in Frank Furt. West Germany. After a concerted Central Bank Effort earlier this ninth currency dealers have been extremely cautious. The Dollar hovered around the l.96-Lcvcl most of last week As traders sided time until the release of the important . Economic data. Shortly before the Trade figures and the pro Ducer Price Index were announced Friday the Dollar closed in Frankfurt at 1.9758. Within hours of the Frank Furt close news of the decreased . Trade deficit drove the Dollar to More than 1.99 Marks. Military banking facilities base their by Rosemary Sawyer rates on the Frank Furt midday fixing putting the rate at 1.95 Marks through monday. The Dollar changed Little in its relationship to other foreign currencies during the week. In Mil itary banking facilities one Dollar will buy 1.349.48 italian lire 6.39 French francs and 2.20 dutch guilders. In London where trading also closed before the . Trade figures came out one British Pound Cost $1.5549 Friday compared with $1.5485 one week ago. This puts the military Bank rate at $ 1.57 through monday. When the Trade data finally came in Friday the $7.58 billion july deficit figure surprised Many analysts who had been predicting the seasonally adjusted figure would Rise to at least $8.5 billion. Instead for the second month in a Row the deficit dropped Well below the Range of $8 billion to $11 billion the Range it had been mired in since Early last year. The decline is attributed to a Sharp drop in imports of foreign goods. The Export of . Goods has remained High despite the stronger Dollar that caused foreign buyers to dig a Little deeper in their pockets to buy  August producer Price Index could also be viewed As a Good sign for the Dollar. The . Labor department reported Friday that falling Energy prices had driven the Index Down by 0.4 percent although food prices increased slightly. Some economists arc More reluctant to View the Price Index movement positively Ott  of the volatile nature of food and Energy prices the report does t necessarily reflect a reverse in inflation. Although july s figures showed a Trade deficit reduction a report issued wednesday by the International monetary fund warned that cur Rency Exchange rate adjustments alone will not resolve the continuing problems of the . Trade deficit and japanese and West German  report said that because the . Econ omy has Little capacity for increased Export production further Exchange rate changes in the absence of changes in policies would have a minimal effect. Such policies would focus on among other things promoting Domestic de Mand in countries with surpluses rather than increasing  fund called on the group of seven Indus trial countries the United states Japan West Germany France Britain Italy and Canada to intensify and sustain their policy Courdina  g-7 finance ministers Are scheduled to hold their regular meeting in Washington on sept. 23 and 24. To Sim a banker Hopes pay lines can be shortened for gis by Dave Diehl  Raf Mildenhall. England merchants National Bank s executive vice president. Ken Carr is a Man with guts or vision or both. In almost the same breath the Man from the Indi Anapolis based Bank unflinchingly said gis will Proba Bly always be wailing in payday lines and then predicted that his Bank will be running the military contract for a Long time. I Don t know How to get rid of the lines Carr said in an interview when the entire military population is paid on the same  and while Carr believes that Long payday lines won t become a thing of the past he said merchants is doing its Best to make them Shorter by taking Small but important Steps such As not allowing tellers to take lunch Breaks when the noon hour crowds descend on the Banks. Relief will also come the executive said from the addition of 1980s technology and automation across the Bank s european network and of 45 extra tellers at branches in West Germany. Since winning its first contract from american express in september 1987, merchants has been Busy catching up in Europe where the Community Bank were using technology that we have been familiar with for 15 to 20 years Carr said. Adapting automatic Teller machines to give Bank customers their account balances thereby keeping them out of Bank lines is just a Start he said. Carr is now heading a team in England to take Over service from american express at 20 Community Bank branches by nov. I. In the past two years. Merchants was awarded de sense department contracts for Community Banks in West Germany. Greece Holland Britain and  March 1990, when it opens branches in South Korea and the Philippines merchants will operate 187 Community Banks around the Globe. We re very interested in holding onto the con tracts said Carr noting that the government con tracts represent 8 percent of the company s business. Along with its commercial banking operations Mer chants has about 45 branches in Indiana. And the company that holds More than 88 percent of the defense department s military banking con tracts has no plans to slow Down. Although merchants failed to win the contract for about 25 branches in Ciudin and Japan from fort Sam Houston Bank it will try for it again Carr said. If merchants can become the sole Community banker Carr said costs to the customer can be reduced. Merchants he said is committed to better customer service. Carr unashamedly stated that if merchants plans to make More Money it will have to give the military communities better service and encourage More Loans and deposits with their branches. Our theory is that if it is Good for merchants Bank it s Good for the government Carr said. We would expect that merchants Bank s new employees will be More aggressive on customer  advertising and aggressive customer service will typify merchants approach. "1 Don t think that the military Banks in the United kingdom have been very aggressive in Loans and deposits. The Only thing that will get that for us Carr said is customer  recession remains big fear but few Are acting that Way b John Cunniff a business analyst new York in a Survey of chief executives a few weeks ago about 60 percent said that Over the next two years recession not inflation was the biggest threat facing the Economy. At the same time a Commerce department Survey shows businesses were expressing optimism about the Economy by raising their capital outlays 7 percent Over a year ago with much of the Money going for expansion. The same dichotomy shows up in consumer surveys those interviewed express fear of a recession but then go out and buy cars and houses strengthening those industries at the very time economists Are warning of turndown. Everyone talks about recession economists Busi Ness people Consumers government officials academics students. But do they really believe a recession is imminent that it seems is an entirely different mat Ter. Part of the explanation lies in the conviction that after seven years of expansion an unusually Long growth period the Economy must have a recession. Has t it always been that Way Aren t recessions Nec Essary to restore balance throughout this Century at least recessions have indeed been viewed As antidotes to excesses in buying borrowing and expectations and there is lots of circumstantial evidence to suggest officials have deliberately created them. But there is nothing sacred or inevitable about recessions nothing in the books that says economics must have recessions which generally if not officially arc said to involve two successive quarters of economic shrinkage. Many economists believe that in some instances an economic slowdown might accomplish All the correction necessary reduce expectations discourage debt and overspending Lessen strains on capacity with out shrinking output. In fact the possibility of doing that very thing is the current aim of the Federal Reserve Board its reason for tightening or loosening the Money Supply not Rais ing or even lowering interest rates. That Effort As some economists View it might very Well result in a growth recession a contradictory term that nevertheless suggests an Economy continuing to move Forward but at an almost imperceptible rate. More and More economists today speak of rolling recessions in which the Economy never shrinks As a whole while separate industries within the Economy go through private downturns at different times. In such a situation the National statistics never show a recession but for practical purposes something did occur that had a similar Impact. Within the past seven years there Are indications that it actually has happened. Something similar occurs when the Economy in some geographical areas of the country shrinks while expansion even Boom occurs elsewhere. Averaged out. The National Economy docs not have a recession but recession has occurred. Within recent years for instance Large areas of the country experienced severe downturns because of simultaneous problems in Energy agriculture manufacturing and mining but coastal booms prevented an official recession. For those who continue to fear a recession simply because the current expansion is so old there might be some Solace therefore in the notion that official statistics aside the Economy might already have had its recession. In 1984. One analyst Sindlinger & co., estimated that 34 states involving a majority of the nation s land area had fallen into recession some of them very deeply. Offsetting booms elsewhere hid the fact at least statistically. For practical rather than statistical purposes those downturns May have accomplished the same results. If so the current economic expansion might not be As old As it seems and things might even be looking up. The University of Michigan economic Outlook which has a pretty fair record for anticipating events Over the year to come Calls for the current slowdown to Bottom out by the end of the year without turning into recession. No Boom say the Michigan economists but no re cession either official or unofficial