World/Nation
The Battalion Monday, Oct. 31, 1988 Page 7
eads of S&L’s meet in Hawaii to plan industry strategy
[HONOLULU (AP) — Savings institu-
executives, enduring their worst
pses since the Depression, face critical
Icisions next year that will determine
k future of their industry.
Ilnthe first six months of 1988, the na-
In’s 3,048 Savings & Loans, lost $7.5
Blion. By year’s end, losses will almost
Irtainly surpass the previous record of
J.8 billion, set in 1987.
■Amid the tide of red ink, 4,050 S&L
jtecutives and their spouses gathered in
s palm-ringed resort hotels along Wai-
i Beach for the 96th annual conven-
pnof the U.S. League of Savings Insti-
Jions, the industry’s oldest and largest
Ide group.
Ilnthe opening session Monday, exec-
|ves will begin mapping strategy for
when Congress will consider
Jethcr taxpayers must pay to bail out
i S&L deposit insurance fund, which
so far - has been industry-funded.
At midyear, 497 institutions were in
solvent, but still open, because federal
regulators lacked the money to shut them
down and pay off depositors. Another
408 were solvent but losing money.
The Federal Home Loan Bank Board,
which regulates S&Ls, estimates the to
tal cost of cleaning up the mess at $45
billion to $50 billion, but private analysts
go as high as $100 billion.
Much of the red ink is concentrated in
the Southwestern oil states of Texas, Ok
lahoma and Louisiana, hard hit by the
collapse of oil prices and the resulting
drop in real estate values.
But, the losses were magnified in
Texas, and also in California and Flor
ida, by lax state regulations that per
mitted thrift institutions to make risky in
vestments far removed from traditional
home mortgage lending.
Congress will almost certainly include
some sort of measure aimed at prevent
ing the problem from recurring. That de
cision will be made at the same time law
makers figure out how to pay the bill,
whether through a direct appropriation
from the Treasury or through some sort
of taxpayer-backed guarantee.
Even if remaining S&Ls escape hav
ing to pay more to resolve the crisis,
they’re sure to find many of the measures
attached to a taxpayer bailout distasteful.
The worst, from the thrifts’ point of
view, is one proposed by Rep. Gerald
Kleczka, D-Wis. It would spell the end
of a separate savings and loan system,
merging it with the fund that insures
commercial banks.
Theo H. Pitt Jr., the chairman of Pi
oneer Savings Bank in Rocky Mount,
N.C., and outgoing chairman of the U.S.
League, said the trade group’s two goals
ymphony premiers
n pyramid’s shadow
m
[lEOTIHUACAN, Mexico (AP)
■With the great pyramids of Teoti-
bacan as a backdrop, Spanish tenor
fiacido Domingo led the premier of
[Aztec Songs,” a choral symphony
[ritten in a 500-year-old Indian lan-
page.
“Aztec Songs” is based on the po-
- of Nezahualcoyotl, a ruler of the
lahuatl tribe who died in 1472.
1 The songs were performed Satur-
Jay night in Nahuatl, an ancient Mex-
lan tongue that gave the world the
lord for chocolate. Thousands of
pople in Mexico still speak Nahuatl
nd there are Nahuatl poets still writ-
jig today.
“I can’t really explain directly why
[wrote the piece in Nahuatl,’’Argen-
: composer UaTo ScWirin sari vn an
hterview. ”1 found it to \>e a very
veet, musical language, one in
Ihich the sounds of the words dic-
bted interesting melodies.
“But the real answer is that there’s
something magic about it, that it
inspired me,” he said. “There’s
something magic in the art of music
anyway.”
Schifrin conducted the symphony
with a baton of obsidian, the gleam
ing black volcanic rock carved with
great artistry by Mexico’s pre-Co
lombian people, in a icy wind before
an estimated 10,000 people at the
foot of the Pyramid of the Moon.
The audience greeted Domingo,
who performed with a cold, with an
especially warm round of applause.
The tenor has relatives in Mexico
and his efforts to help the city recover
from the devasting 1985 earthquake
has endeared him to Mexicans.
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Friday, Domingo noted the devasta
tion wreaked by Hurricane Joan in
Nicaragua and called for disarma
ment and a fight against hunger in the
world.
“It would be great if the United
States and the Soviet Union could
look to their consciences and say that
kids are more important . . . but, of
course, these are dreams, Utopias,”
he said.
“There are troubles that can’t be
fought, like natural phenomena,”
Domingo said. “But there are others,
like war, corruption and drug addic
tion, that we can fight together.”
Soviet baritone Nikita Storoyev
and the Chorus and Symphony Or
chestra of Mexico City also took part.
The performance was part of a
campaign to raise $300,000 to pre
serve Teotihuacan, recently desig
nated a “treasure of mankind” by the
U voted Hatvorvs.
The performance was sponsored by
American Express, which is celebrat
ing its 25th anniversary in Mexico.
next year will be to persuade Congress
that healthy S&Ls can’t shoulder any
more of the burden of bailing out the in
solvents, and that American home buy
ers need a separate S&L system.
S&Ls, because of the poor condition
of the Federal Savings and Loan Insur
ance Corp., already pay more than twice
“I believe Congress is be
ginning to recognize that
we haven’t abandoned
our traditional role.”
— Theo H. Pitt
Chairman of bank
as much for deposit insurance as com
mercial banks — 21 cents per $100 of
deposits for S&Ls compared with eight
cents for banks.
Bank Board Chairman M. Danny
Wall, who is scheduled to address the
convention at its closing session on
Thursday, says that unless the FSLIC
gets addi ional help, S&Ls will be pay
ing the higher assessment for 30 years.
“It’s a 30-year mortgage we just flat
out can’t handle,” Pitt said in an inter
view.
Equally important for the trade group
in the upcoming year will be persuading
Congress to preserve the separate S&L
regulatory system.
Early in the 1980s, when soaring in
terest rates made it impossible for thrifts
to make money on their old, fixed-rate
mortgages, many in the industry argued
that new powers would allow thrifts to
diversify and pull themselves out of the
hole.
As it turned out, Pitt said, the institu
tions which strayed most from traditional
mortgage lending in the last few years
earned the least.
Now the industry will be arguing that
S&Ls are necessary to keep money flow
ing to home buyers.
A study by the U.S. League this sum
mer showed that thrifts and mortgage
banking companies owned by thrifts pro
vided 54 percent of the country’s resi
dential mortgages last year.
“I believe Congress is beginning to
recognize that we haven’t abandoned our
traditional role,” Pitt said. “If we don’t
do it, you’re going to have to reinvent
the system.”
Canadians call debates
in U.S. ‘superficial’ ploys
What they do see south of the border is
often dismissed as an excessive amount
of media handling and too much superfi
cial treatment of the issues.
Canadians congratulated themselves
after the debate series among the leaders
of their three major parties by comparing
the breadth of the discussions with the
debates between the U.S. candidates.
“Canada’s leaders were much more
forthright, articulate and revealing of
themselves than the candidates for the
White House in the U.S. debates,” the
independent Globe and Mail newspaper
said in an editorial.
“Issues received far more vigorous
airings here within the limits of tele
vision,” it said.
Six hours of debates between Prime
Minister Brian Mulroney of the Progres
sive Conservative Party, Liberal Party
leader John Turner and Ed Broadbent of
the socialist New Democratic Party crys
tallized the free trade agreement with the
United States as the campaign’s domi
nant issue.
Before Mulroney dissolved Parlia
ment Oct. 1 to call the election, some
concern was voiced that a November
election could be complicated because
voters might be distracted by the U.S.
campaign.
Instead, a once complacent political
race, in which Mulroney appeared
headed for easy victory, now is becom
ing among the most electric in memory.
A survey by the Environics polling
firm found that 74 percent of Canadians
either watched the debates here or fol
lowed news reports about them.
Polls have concluded that Turner eas
ily won the debates, in which he accused
Mulroney of selling out Canada in the
free trade agreement.
Anything less than a majority govern
ment for Mulroney in the Nov. 21 vote
places in doubt the future of the
agreement, which would eliminate tariffs
and trade barriers between the two coun
tries over a 10-year period.
The U.S. Congress easily approved it
this year, but Canada’s Parliament has
yet to act on it.
If passed in Canada, the agreement
would take effect Jan. 1.
Some political analysts say the U.S.
campaign between George Bush and Mi
chael Dukakis is simply considered bor
ing. They note that the contest slipped
off the front pages in the United States in
its middle weeks.
“There’s no clear favorite for Canadi
ans,” David Eirikson, a political science
professor at the University of British Co
lumbia, said in a phone interview.
“They are busy with domestic affairs.”
A Gallup poll published by the To
ronto Star in early October said 56 per
cent of Canadians would vote for Duka
kis and 44 percent for Bush, if they
could take part in U.S. elections.
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