European Stars and Stripes (Newspaper) - May 23, 1994, Darmstadt, Hesse                                Page 14 the stars and stripes Money matters monday May 23,1994 today s rates following Are fixed rates at which Community banking and credit Union facilities will sell foreign currencies to . Personnel for personal use British Pound. 1.55 dutch Guilder. 1.80 German Mark 1.61 greek drachma. 240.5608 note toe rates above apply within the Host country. Figures Are expressed in dollars to the British Pound other currencies to the Dollar following Are Interbank rates that fluctuate and should be regarded As the approximate value of the . Dollar to foreign currencies austrian Schilling a a a a  11.627, Bahrain Dinar ,. 0.37675 belgian franc 34.05 British Pound 1.5098 Canadian Dollar 1.3739 danish Krone. 6.4682 dutch Guilder. 1.8585 French franc 5.6555 German Mark 1.654 italian lira 1,583.70 Kuwait Dinar. 0.29785 norwegian Krone. 7.15 portuguese escudo. 170.83 saudi rial. 3.75 Spanish peseta. 136.55 Swiss franc. 1.41 turkish lira. 33,000.00 note figures Are expressed in dollars to the British Pound other currencies to the Dollar Gold quote $381.55 an ounce Silver quote $5.53 an ounce sources merchants National Bank amp Trust co., the associated press United pres3 International me As temporary by the Washington Post Washington mortgage interest rates made their first significant move downward in three months this past week but some lending officials predicted they will head Back up relatively soon. A a. After the Federal Reserve Board raised Short term interest rates tuesday rates on 30-year fixed rate mortgages dropped to 8.56 percent from 8.77 percent a week ago which had been the highest level in two years. Rates began their ascent after the fed tightened interest rates feb. 4. David Dercah chief economist at the mortgage Bankers association of America said the lower rates Are Quot a temporary euphoric reaction to the feds resolved to fight inflation. Japan . Seek to revive stalled Trade negotiations by the Washington Post Washington a . And japanese Trade negotiators agreed saturday to extend efforts to break a three month deadlock in economic talks. The . Team led by Deputy Trade representative Charlene Barshefsky met briefly in Washington on saturday for a third Day with japanese negotiators to consider japanese proposals aimed at Rev starting the a a framework talks a Market opening Effort initiated by president Clinton in Tokyo last july. Although the White House launched the framework negotiations with much fanfare the initiative collapsed in february following a meeting Between Clin ton and Morihiro Hosokawa then prime minister of  spokesman for . Trade representative Mickey Kan Tor said saturday that negotiators from the two countries thought it was important to meet saturday a to further clarify and address the issues on the  officials on both sides have kept mum about the substance of their discussions. Negotiators Are expected to reconvene today. The two sides Are bickering Over How to contain Japan a $131 billion Trade surplus. Clinton says the surplus and Low Levels of foreign direct investment in Japan prove that the worlds second largest Economy is a dangerous a a outliers in the world Economy As Well As a drag on global growth and free Trade. In essence this months negotiations Center on the question of whether to keep talking. Still a lot is Riding on the outcome. Currency and debt traders fearing commercial warfare Between the worlds two biggest economies have pushed up both the value of the japanese yen and . Interest rates since the framework talks collapsed in february. Officials on both sides dread the consequences of a second breakdown. One indication of the seriousness of these talks japanese officials have gone to extraordinary lengths to avoid commenting about their Progress. Typically japanese Trade delegations provide detailed briefings to the japanese press. This time they have ducked reporters. New tube general motors shareholders examine a direct system demonstrated by Eddy w. Hartenstein president of the unit of pm Hughes electronics corp. That makes it. The system on display during a break Friday at the annual pm stockholders meeting on in Shreveport la., will allow viewers to receive about 200 channels As Well As movies for rates competitive with traditional Cable television. The Cost is estimated to be under $700 for the unit and $21 to $25 a month for the Basic service. By Rob Wells a business writer Washington a highly publicized losses from derivatives investments Are cropping up in disturbing places for Small investors Bond and Money Market Mutual funds. In recent weeks two Large funds reported Sharp declines chiefly due to fizzled derivatives. Their misfortune caught the Eye of the nations top Stock Market regulator who urged the Mutual fund Industry this week to inform investors clearly when funds venture into the sometimes Uncertain world of derivatives. Simply put derivatives Are financial contracts intended to minimize a company a financial risk in the Bond or currency markets. They also can be used to speculate on anticipated Market movements. Arthur Levitt jr., chairman of the securities and Exchange commission told a gathering of Mutual fund officials wednesday that he was taken Aback by the sudden losses. One prominent example is the Piper Jaffray institutional government income fund with an investment performance Down about 21 percent for the last three months. The fund lost $160 million of its net asset value since the beginning of the year As rising interest rates eroded the value of mortgage backed derivatives. In an unusual move Piper Jaffray invested $10 million into the fund Friday and said it plans to close it to new investors. The Paine Webber Short term . Government income fund suffered a derivatives related Jolt earlier this month with its fund falling 4 percent in two  regulators want derivatives customers and the Banks and securities firms that sell them to know the risks of the computer generated contracts. Levitt warned the Industry about a practice called yield enhancement. That a when Money managers use derivatives As an investment strategy to improve a funds returns instead of using the con tracts to hedge against risks in the markets Quot a a a a a a. His warning was aimed at derivatives in Money Market funds. Many investors a often perceive these funds As the functional equivalent of Bank accounts a lev it said. He warned of disturbing and Long lasting implications for the Industry when derivatives used to enhance yield of the funds backfire and Cut into the funds performance. Its difficult to determine the number of funds that use derivatives to juice up their returns. Overall the Mutual fund Industry with $2.1 trillion in assets holds a relatively Small portion in derivatives about $7.5 billion according to the investment company Institute a Trade group. And no data Are available on what portion of those derivatives is used for responsible hedging or for speculation. Bill Mcbride International editor at Lipper analytical services in new York said there Are a few warning signs for investors that a particular fund is perhaps dipping too deeply into the derivatives morass. A any time you re looking at a coherent category of funds. And you find a fund that a no. 1 with a very High total return and very High yield and its much higher than the no. 2 fund chances Are that a a derivative strategy a Mcbride said. A and chances Are that portfolio manager is taking risks that you done to understand and More tragically risks that he or she does no to understand. A you should never Chase performance and its doubly doubly dangerous in fixed income funds a he said. An important Case involving derivatives and deceptive sales literature was settled last month in new York. The new York Muni fund without admitting wrongdoing agreed to pay $37,500 in investigative costs in a settlement with the new York state attorney general a office concerning its sales literature. The attorney general a office said it did not know of any investors who had lost Money in the fund