European Stars and Stripes (Newspaper) - July 8, 1991, Darmstadt, Hesse                                Monday july 8, 1991 the stars and stripes a Page 17money matters i confronted by depressed prices for natural Gas and weak profits in Oil refining Shell Oil co. Is re trenching. The nations sixth largest Oil company and the largest gasoline retailer Shell has begun cutbacks that it says will reduce its work Force by 15 percent Over the next year to 18 months. Owned by Royal dutch Shell group of the Netherlands the company conducts most of its exploration in the United states particularly in the Gulf of Mexico where it has located some potentially Large Energy  rates London up fridays rates for the . Dollar to other currencies figures Are expressed in dollars to the British Pound other local currencies in dollars Gold was quoted at $370.00 an ounce Silver at $4.54. July 3 july 5 British pound.1.6055 1.6165 German mark.1.828 1.829 French franc.6.208 6.2285 dutch Guilder .2.0625 2.0715 belgian franc .37 6875 37.7420 italian lira. 1 363.50 1,366.40 Swiss franc .1 5805 1.5745 greek drachma .200.07 200.98 turkish lira .4,365.90 4,391.50 saudi arabian Riyal 3 7504 3.7504 Spanish peseta .114.80 115.40 portuguese escudo 159.76 160.40 Canadian Dollar .1 1424 1.1430 austrian Schilling. 12 888 12.9840 norwegian Krone. 7.14 7.18 danish Krone .7 077 7.1115 these Are unofficial rates As reported by wire service and banking sources and they Are listed to give some idea of daily currency fluctuations. The Only official rate concerns the Sang of German Marks to . Personnel for personal use and this will be 1.79 through monday based on fridays noontime  tries to put together global network St. Paul Minn. A the co chairman of Northwest airlines is working to put together a three Carrier global airline network. Northwest and its co owner Kim would link up with australians Qantas airways to form the network said the co chairman a1 Checchi. Each airline would offer More Complete service around the world and could Transfer passengers to the others increasing traffic for All he said in Sydney Australia. A we would envision the Day in the near future when travellers on this global network could travel around the world on one ticket and perhaps even one flight number a Checchi told the Saint Paul Pioneer press. Qantas serves 20 other countries from Australia and carries about 40 percent of australian air travellers. The Minnesota based Northwest is concentrated in the United states and the North Pacific. Kim primarily serves Europe Africa and parts of Asia. Of the major  carriers Only Delta air lines has a similar global network. Checchi said Northwest will meet a wednesday deadline for notifying the australian government of its desire to bid for a stake in Qantas. The government owned airline then will select bidders. International interest rates May stay High report says Washington up a increased Competition for capital around the world May maintain upward pressure on interest rates the world Bank has said in its 1991 annual report. A a seven year expansion in the world Economy came almost to a halt in 1990,�?� the report said. A the slowdown became More pronounced with the Gulf crisis in August 1990.�?� the report focused this  a the challenges of development a noted that Radical change is under Way in the global Economy As Eastern Europe and less developed countries have launched major economic reforms and the european Community moves closer to political and economic Union. A in some ways the International Economy will be unfavourable to development in the coming decade a the report said. A interest rates May remain High and growth is Likely to remain slow worldwide. A no Early end to the debt crisis is in sight nor is any substantial resumption in North South capital  the financial requirements of German unification and War related reconstruction in the Middle East a exerted upward pressures on Short term interest rates in Germany and Japan Quot despite the economic slowdown in 1990 and Early 1991. A real Gross Domestic product growth in the Industrial countries slowed to about 2.6 percent in 1990, compared with 3.3 percent in 1989 and 4.5 percent in 1988,�?� the report said. Canara Britain and the United states have been in recession while growth has also slowed elsewhere in Western  equity prices in Japan have fallen by about 50 percent and the Quality of commercial Bank portfolios in both Japan and the United states has deteriorated a it said. A the financial problems of the private sector in several Large economies will continue to hamper growth. Output in the Industrial countries is expected to expand by less than 2 percent in 1991.�?� the world Bank said the financial situation of some of the biggest Banks and insurance companies of the United states and Japan has been weakened by rising interest rates falling share and real estate prices and bad investments. A was these institutions struggle to raise capital they arc cutting Back on new lending Quot the report said. Quot Japan and the United states appear determined to contain the problem by bolstering Deposit insurance and restructuring failed  world credit markets a already influenced by the financing requirements of Eastern Europe and the Middle East Are bound to be affected upward pressure on interest rates will remain for the medium  these pressures Are bound to hinder developing countries that Quot were bypassed in the past decade by International lenders and investors mainly because of their High external debts and deteriorating economic and political conditions Quot it said. During the past decade a aggregate net resource transfers to these countries shifted from positive to negative a the report said. A the investment output ratios of the Low and Middle income countries fell in the 1980s and have not  loan losses of West coast Banks trigger fresh unrest in Industry by Chet Currier the associated press new York a Wall Street analysts and investors who follow the banking Industry Are worried that a new financial horror movie is opening in the Stock Market. Still Hopes persist that Bank Jolt ii a the sequel wont be As dramatic or As drawn out As last years original shocker which Cost Many Bank share owners a lot of peaceful sleep. The current Story line begins with an outbreak of fresh attacks by killer loan losses at some big West coast Banks. In late june for example Wells Fargo amp co. Said it was setting aside about $350 million As a loan loss Reserve for the second Quarter and expected its earnings for the april june period to fall to 20 cents a share from $3 a share in the corresponding Quarter of 1990. Then last week Security Pacific corp. Announced that it would be taking a second Quarter charge More than $100 million larger than the $271.1 million provision made in the first Quarter. It too projected sharply lower profits for the second Quarter. Both occasions sent a shiver of Selling through West coast Bank stocks in particular and shares of big Banks in general. A the loan Shock from Wells Fargo is a reminder that Many Banks face problems not Only in real estate Loans but in highly leveraged transactions and other credits a said George Salem Bank analyst at Prudential securities inc., in a report on the subject. A however we believe the across the Board sell off in Bank stocks that accompanied Wells Fargo a announcement was unjustified. The vulnerability of any single Bank derives from its credit  Many observers say the timing of the. Latest announcements played a Large part in their Impact Given that Bank stocks had been rallying strongly for months from the lows they hit last fall. In an extreme instance Wells Fargo shares traded at record highs just under $100 this Spring before the loss Reserve announcement sent them plummeting to the mid-60s. A much of the Bank Stock group enjoyed a rally that has pushed Price earnings multiples Well above historical norms a the value line investment Survey said in its latest quarterly analysis of the Industry dated june 14. A we fear the rally could stall. A the Industry a earnings prospects May be improving. But problem loan growth typically lags turns in the economic Cycle. A problem Loans continue to increase though at a declining rate and May not Peak until late 1991 at the  similarly said analysts Arthur Soter and Bryan Derman at Morgan Stanley &1 co. In a june 25 report a the recovery of Bank Stock prices is looking very mature to us. We think its overdue for a pause even a correction in the near term. A by the same Token we Don t believe that the group is in danger of entering a prolonged period of negative performance such As it experienced from late 1989 through much of 1990.�?� Banks of Many shapes and sizes have been Busy of late working to repair damage from the credit spree of the 1980s. Under prodding from regulators they have adopted much More stringent lending standards and tried with some Success to Widen spreads Between their borrowing and lending rates to improve profitability. But analysts warn that it May take a lot More time before All the mess is cleaned up from Banks exposure to the shakeout in the real estate Market. Said value line analyst Theresa Bro Phy a working out problem real estate Loans May prove especially difficult in Light of the considerable oversupply of vacant space a Over 10 years Worth in some office building  Federal express to Purchase airbases by the los Angeles times new York a Federal express corp. Has agreed to Purchase up to 75 cargo aircraft from european air plane manufacturer Airbus industries in a Deal Worth an estimated $5 billion. The order will serve As a major inroad into the american Market that the Paris based company has been courting analysts said. In writing the order Airbus a the worlds second largest aircraft manufacturer a also scored a Victory Over rivals Mcdonnell Douglas corp. And Boeing co. Federal express the nations largest overnight package delivery service said the agreement consisted of 25 firm orders for the a300-600f As Well As options and conditions for 50 additional aircraft. Reports of the Deal surfaced last month during the Paris air show. But the companies refused to confirm the reports at the time. Federal express chairman and chief executive officer Frederick Smith said the a300-600f a promises very High  the Airbus aircraft would have larger payloads than some Federal express planes said Armand Schneider a spokesman for the Memphis based company. For instance one Airbus would have a payload of 100,000 pounds More than twice that of the company a Boeing 727s. Federal express will receive the first airbustreighterinl994. Airbus is owned jointly by France Germany Britain and Spain. Boeing co. And Mcdonnell Douglas say government subsidies give Airbus an unfair competitive advantage