Word: ls
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...person SEC unit to combat securities violations at financial institutions. One of the group's goals: to prevent more disasters like the case of Lincoln Savings & Loan, whose chairman, Charles Keating, managed to run up $2.5 billion in losses, driving the California thrift into bankruptcy. With S&Ls foundering almost daily, the gesture seems like an afterthought -- and an undersized one at that...
...regulations. That may have been beneficial, but it enabled lots of sharp characters to make lots of money in lots of sharp ways. The most extreme example is the savings and loan scandal, which features fraud, bribery, favoritism and freewheeling incompetence. Some 800 of the 2,600 remaining S&Ls are now insolvent or nearly so, and the bailout will ultimately cost the taxpayers at least $150 billion to $200 billion and possibly a good deal more...
When Toyota introduced its Lexus LS 400 luxury automobile in September, it ran ads touting the $35,000 sedan as the ingenious brainchild of "1,400 perfectionists" and "close to faultless." Toyota was wise to hedge that claim. Because of safety defects, the company last week recalled all 8,000 of the Lexus LS 400s it has sold in the U.S. The Japanese carmaker made the decision after it received some customer complaints about loose wiring, a faulty cruise control and a malfunctioning brake light. The defects have caused no accidents or injuries, but the episode is an embarrassment...
...banks and the Government already own an awful lot of homes -- 250,000 would be a rough estimate -- which alone is reason to expect prices to be weak. The Resolution Trust Corp., set up to sell off the holdings of hundreds of failed S&Ls, is pledged to avoid triggering a price crash. Yet this is an arm of the same Government, after all, that actually lost money auctioning off confiscated drug loot...
That crisis could soon become worse, because new requirements designed to strengthen the thrifts could instead push many of them into extinction. Starting last week, S&Ls must greatly increase their capitalization as a hedge against losses from problem loans, interest-rate swings and bad investment decisions. Among other things, they will be required to maintain "risk-based capital" equal to 6.4% of their risky assets, such as shopping centers and fancy resorts. Because many thrifts are only marginally profitable, raising the funds to meet the standards may prove impossible for them. Some analysts warn that half the nation...