European Stars and Stripes (Newspaper) - January 3, 1992, Darmstadt, Hesse                                Page 14 c the stars and stripes Friday january 3, 1992money matter today s tip swedish furniture retailer Ikea plans to buy rival Stor furnishings International inc., struck by the economic downturn for More than $19 million in Cash. Both chains sell ready to Assem ble furniture and target budget conscious customers. The companies settled a lawsuit in 1989, in which Ikea accused Stor of copying its retail concept store layout and merchandise mix. Ikea has 100 locations in 25 countries with sales last year of $3.8 billion. It entered the . Market in 1985 and operates seven stores including one it opened last year in the Southern California suburb of Burbank. Sales at the . Stores were $284 million last  rates London up thursday s rates for the . Dollar to other currencies. Figures arc expressed in dollars to the British Pound other local currencies in dollars Gold was quoted at $351 75 an ounce Silver at $3 87. Dec. 31 Jan 2 British Pound 1 8670 1 86b5 Gin Man Maik 15180 1.5183 French franc. 5 1000 5 1875 dutch Guilder 1 7d90 17220 belgian Lone .31 25 31.25 italian lira. 1,151 50 1,151.50 Swiss franc. 13570 a greek Diac Tima. 175 20 175 30 turkish lira 5,007.80 5.087.50 saudi arabian Riyal. 3 7500 3 7409 Spanish peseta. 96 50 90 53 portuguese escudo.134 20 133 25 Canadian Dollar. .11558 1.1533 austrian Schilling 10.6750 10 6810 norwegian Krone. 5 9750 5.9775 danish Krone 59110 5 9040 these Are commercial rates and can be related Only to the use of foreign currency by . Forces for official business. The Only official rate concerns the Sale of German Marks to . Personnel for personal use and this will be 1.48 through Friday based on thursdays noontime Price-fixing.4 More Banks involved in huge mergers from wire reports new York two of the largest Hank mergers in the nations history were completed this week. Manufacturers Hanover cd Orp. Merged into chemical banking cd Orp to form the nations Thirol largest banking company with about $140 billion in assets. And a cab corp. Combined with a amps sovran corporation to form nation Bank the nations fourth largest banking company with $119 billion in assets. New York based Citicorp with about $217 billion in assets remains the nations largest banking company. Ban America corp. Of san Francisco is awaiting approval of its merger with Security Pacific corp. Of los Angeles. After the merger ban America will still be the nations second largest with assets of $193.60 billion. The manufacturers name will be dropped officially by june 30, when the Banks Combine branches . Reports dash Hopes for fast economic recovery Washington a the nations chief economic forecasting gauge suffered its biggest decline in 10 months in november while new Home sales failed to improve despite the lowest mortgage Rales since 1973, the government reported this week. Analysts said both reports indicate that while the Stock Market has staged a Strong year end rally the Economy wont show any significant improvement until Spring at the earliest. The Commerce departments Index of leading economic indicators dropped by 0.3 percent in november its fourth consecutive poor showing. The Index composed of 11 barometers had been racing ahead earlier this year As Hopes Rose that the country s first recession since 1981-82 had ended. But the improvements stopped after August. The Index fell by 0.2 in september and posted a weak 0.1 percent Rise in october before falling again in november. A the Stock Market is looking ahead to a recovery in the second half of next year but the leading indicators Are telling us we have an extended recession through the first Quarter at least a said Allen Sinai chief economist of investment firm Boston co. In a second report the Commerce department said new single family Homes were sold at an annual rate of 520,000 units in november the same As october. While sales improved in the South and West they dropped in the Midwest and especially the Northeast where demand fell to its lowest level in nearly a decade. Analysts said they still believed the lowest mortgage rates in 18 years will lure buyers into the Market but that a sustained housing rebound probably will not occur for several months. The leading Index is designed to pre dict future activity. A companion Index that tracks the Economy s current performance the coincident Index fell by a Sharp 0.8 percent in november after dropping 0.2 percent in october. Some analysts viewed that As an indication the Economy lapsed Back into recession in the october Decca bar Quarter after two quarters of weak growth. Analysts said the Economy wont begin growing again until the Confidence level rises to the Point where Consumers increase their purchases of big ticket items such As cars and Homes. The administration is continuing to work on an economic growth package that president Bush will unveil in his Jan. 28 state of the Union address. Analysts said that package which will Likely include a Middle class tax Cut combined with further easing of interest rates by the Federal Reserve should help turn the Economy around by midyear. Dollar will plunge to record lows against German Mark expert says by the new York times As the new year begins the Dollar is falling just like last year. Bui analysts Are not soon expecting a sudden and Sharp rebound of the sort that occurred at the beginning of 1991. In fact some forecasts show the Dollar falling to record lows against the German Mark before it makes a modest recovery late in the year. A the latest Jolt to the sagging Dollar came the week before Christmas when the Bundesbank raised German interest rates sharply and the Federal Reserve Cut american interest rates sharply a Day later. By the end of the year the Dollar had lost almost All the ground it had gained against the Mark and other european currencies in 1991 and had fallen against the yen As Well. Last year analysts pinpointed the turn in the Dollar fairly quickly though the reverse last february probably came a lot sooner than Many had expected. But they were generally fooled by the Sharpness and Speed of the dollars increase a up 23 percent against the German Mark by july 2. They were a Little less stunned by its sudden plunge at year end when the Hope for immediate economic recovery in the United states evaporated. The Dollar ended 1991 at 1.5170 Marks up Only 1.68 percent and showed similar increases against other european currencies. Against the japanese yen the Story was the reverse. After the flurry of the Dollar rally and the dust following its sudden fall the yen quietly gained on the . Currency. The Dollar ended the year at 124.78 yen Down 7.84 percent even after the japanese Cut their discount rate on monday. This year two main forces will tug at the Dollar the same two As last year. Economic recovery which would help the Dollar has yet to materialize. Nor is there any potential spark like the Victory in the persian Gulf War last year to set off a rally. The sighting of a sure recovery should give the Dollar some strength. A recovery would mean an end to falling interest rates. That would attract foreign investment in the Stock Market and elsewhere to take advantage of the rebound. The Force working against the Dollar is the higher interest rates in other countries. That favors european currencies now and gives a Small Edge to the yen. Short term interest rates in Germany Are 538 basis Points or hundredths of a percentage Point higher than in the United states. In Japan the differential is 138 basis Points. Investors considering the differentials have drained Money out of the Dollar and into the higher earning currencies. A the interest rate argument favors the european currencies a said Neal m. Soss chief economist at first Boston corp. In new York. A the United states will ease More and so will the japanese. But in Europe they cannot ease until the germans Are  John Lipsky director of International Bond research at Salomon Brothers in London said the key for Dollar forecasters is to decide a whether the United states Economy faces some serious structural problems that will push it into a new decline or whether the traditional tools of monetary and fiscal policy will ultimately restore growth in the relatively near future albeit at a modest Pace a Salomons position he said is that the traditional tools will work and that there will he a moderate recovery that will give the Dollar a lift possibly pushing it Back into the 1.60 Range against the Mark by the end of the year. But he said that before there Are sure signs of recovery Confidence could erode enough to push the Dollar to record lows. Against the Mark the Dollar hit a pos world War ii Low of 1.4475 on feb. 11. More financial institution failures foreseen Washington a flush with $95 billion from Congress Federal regulators Likely will step up their closures of failing Banks in 1992 after a Lull in 1991, analysts predict. A they have plenty of Money a new Law and. Stronger Powers than Ever a said Bert Ely a financial institutions analyst in Alexandria a. A they done to have any excuses anymore not to  president Bush in december signed Bills providing Federal agencies with a $25 billion taxpayer appropriation to Deal with failed a amp is and $70 billion in new borrowing authority to handle failed Hanks. According to the Federal Deposit insurance corp., 127 Banks failed outright or stayed open Only with an infusion of government Money in 1991, Down from 169 in 1990. It was the lowest number since 1985, when there were 120 failures. Meanwhile 168 savings institutions were seized in 1991 by regulators or merged with government assistance Down from 217 in 1990 posting a four year Low the office of Thrift supervision said. But by another and More important measure a asset size of failed institutions a 1991 was somewhat worse than 1990. Failed Bank assets totalled $64 billion quadruple the $16 billion total in 1990, As insolvency problems shifted from smaller Banks in the Southwest to larger Banks particularly in accession wracked new England. However a amp a failures showed improvement with assets of the failed institutions declining from $134 billion in 1990, to $91 billion in 1991. Analysts expect both the number of Bank failures and their asset totals to Rise in 1992, the result of this years economic slump and the infusion of Cash into the regulatory agencies. The Odic is projecting 200 failures in 1992, with an asset total ranging from $86 billion to $116 billion depending on whether the Economy is Able to emerge from its slump. Meanwhile Thrift office director Timothy Ryan has declared the a amp a cleanup to be in its a eighth  his Agency is monitoring roughly 60 institutions it expects to declare failed and Send to the Resolution Trust  Agency created to handle the a amp a cleanup