Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: lorne who wrote (34091)	5/18/1999 1:03:00 PM
From: long-gone	Read Replies (1) \| Respond to of 116796

O/T(?) Church sues BestBank ex-execs Tampa ministry, under investigation itself, claims $50 million loss By Carly Schulaka Camera Business Writer Former executives of the defunct BestBank are being sued by a Tampa, Fla.-based ministry that claims it suffered more than $50 million in damages as a result of the Boulder-based bank being shut down last year. BestBank was closed by the state Division of Banking in July because it had more than $134 million in losses and only $23.1 million in reserves. State banking authorities have attributed BestBank's losses to sub-prime lending — issuing credit cards to people with blemished records. In the past year, the Federal Deposit Insurance Corp. filed a civil suit against former bank executives seeking unspecified damages, and a criminal investigation into the bank's failure was launched. Gerald D. Payne, trustee for Greater Ministries International Church, filed a civil suit in Denver District Court on Friday against BestBank owner Edward P. Mattar and the bank's former president, Thomas Alan Boyd. Effective Management Systems Inc., a Nevada corporation owned by Mattar that contracted with BestBank, and Fort Lauderdale, Fla.-based Century Management Systems Inc., also were named in the suit, as were individuals Douglas R. Baetz and Glenn M. Gallant — both shareholders of Century Financial Group. The suit claims Greater Ministries International Church lost the $18 million it had deposited in BestBank accounts and suffered general damages of more than $50 million as a result of the defendants' "negligence and carelessness." (cont) bouldernews.com

To: lorne who wrote (34091)	5/18/1999 2:05:00 PM
From: Alex	Respond to of 116796

OECD QUESTIONS US 'VIRTUOUS CIRCLE'; CONCERN ON EQUITY PRICES FRANKFURT (MktNews) - In an understated assessment, the Organization for Economic Cooperation and Development again questioned Tuesday how long the "virtuous circle" now operating in the U.S. economy can last, raising particular concerns about the level of U.S. equity prices. While the concern was not as pronounced as in its December report, the OECD nonetheless left the impression that a sharp correction of U.S. equity prices was one of the key risks facing the world economy, given the dependence of world growth on the U.S. In fact, the OECD's upward revision to its forecast OECD-area growth this year (to +2.2% from +1.7%) was due entirely to a huge 2.1 percentage point upward revision to its U.S. growth forecast (to +3.6% from +1.5%). Growth forecasts for all other major economies were revised down. "In the United States, the main issue is whether the virtuous circle in which the economy has been operating can continue for much longer," the OECD wrote. "Historically high equity price-earnings ratios, very low household savings and a widening current account deficit are signs of growing imbalances in the U.S. economy. "A downward change in sentiment would have negative, and, in these circumstances, possibly disproportionate consequences on the (overall) economic outlook," the OECD warned. In December, the OECD had projected a sharp slowdown in U.S. growth, in part due to a slowdown in consumer spending. But the continued strong rise in the stock market and the considerable wealth effect this has had on American consumers and businesses has pushed growth well above previous expectations, the OECD admitted. It worried this could not continue much longer. "With price-earnings ratios unusually high in historical terms, investors appear to be anticipating significantly higher earnings growth than has been the norm in the past or the corporate sector can plausibly deliver in the future," the OECD wrote. "Even if the risk premium has durably fallen from the high levels observed over the decades prior to the 1990s, the earnings growth rates required to validate the current level of equity prices seem high for reasonable values of the premium." "Unless real interest rates fall or the dividend payout ratio increases significantly, investors may eventually have to adjust their expectations in light of actual and prospective slowing of earnings growth, thus making the stock market vulnerable to a correction." This possible correction "would have important implications for the economy," causing both businesses and consumers to re-evaluate their recent spending patterns, the OECD warned. In this environment, the OECD argued that the Federal Reserve should keep its policy powder dry for the time being, waiting to see how the economy evolves. While continued strong growth might require a rate hike to keep inflation contained, a large stock market correction could produce a stronger-than-expected slowdown in the economy, requiring the Fed to cut rates. [TOPICS: M$X$$$,MMUFE$,MGU$$$,MFU$$$,MT$$$$] 05:41 EDT 05/18 © 1999 Market News Service, Inc. economeister.com