Word: overdraft
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...trillion spending plan for fiscal 1990 predicts a deficit of $93 billion, a smaller overdraft than those Reagan requested and got in earlier years, when he blamed Democrats for the deficit. It calls for a $4 billion hike in defense spending, $10 billion cuts in programs that mainly benefit the middle class and a $4 billion jump in Government efforts to assist the poor. There are some wildly optimistic assumptions, such as the forecast that over the next year interest rates will fall a whopping 2.7 percentage points...
...their crayons. Last week the firm began distributing, at a cost of $50,000, The Hutton Neighborhood Coloring Book and a box of crayons to its 18,500 workers. The purpose is to boost staff morale, which was battered by Hutton's 1985 guilty plea to a check-overdraft scheme and further bruised by the company's $90 million loss last year...
While many large companies today manage their money by aggressively moving it among various accounts, some of Hutton's branch managers went much too far. They issued a flurry of overdraft checks in order to obtain no- interest loans at a time when rates were about 20%. For 20 months beginning in July 1980, the company obtained as much as $250 million a day in freebie loans on which it could earn interest. Bell termed the overdrafts "so excessive and + egregious" that "no reasonable person could have believed that (their) conduct was proper...
...very top officers at Hutton, though, escaped any charges of wrongdoing in Bell's report. These include Fomon and former President George L. Ball, who is now head of Prudential-Bache. While the investigator deemed that Ball contributed to Hutton's "overdraft culture" because he "constantly exhorted" branch managers to boost their earnings, the president's job description made him responsible largely for sales performance rather than banking or legal questions. As for Fomon, Bell did not hold him accountable because the chief executive had hired qualified underlings and "was entitled to rely on the decisions, judgments and performance...
...large stockholders to welcome a takeover offer. That could make Hutton an easier acquisition target for such firms as Phibro-Salomon, the investment company, or Chrysler, which has been seeking to buy a financial subsidiary. While Hutton executives hope that Bell's report will be the end of the overdraft episode, the story may not be over...