Masonry Magazine December 1987 Page. 40
THE STOCK-MARKET COLLAPSE COULDN'T COME AT A WORSE TIME for bankers. They worry that the campaign for banking deregulation will be put on hold, as lawmakers in Congress take a cautious approach in the wake of the slump. The bankers want Congress to permit them to go into the securities business by amending the Glass-Steagall Act which forbade such activity after 1929. But the stock-market's plunge seems certain to raise fears of going ahead. The lawmakers perceive a public-relations problem in moving too fast now. They may well decide to put off consideration of a measure till next year.
The bankers' fear is that Congress will extend indefinitely a freeze imposed last summer that restricts bank entry into the securities business until March 1. Congress passed the freeze to give itself further time to look at deregulation.
The market crash will be used by opponents to deter bank expansion. They will revive concerns about the potential conflicts of interest between those who lend the money and those who purchase and sell securities for the borrowers.
CORPORATE PROFITS ARE CONTINUING TO SHOW SOLID INCREASES this year, with sectors that were badly depressed a year ago leading the improvement. Some of the basic industries are posting double or even triple-digit gains. Earnings have soared in paper, chemicals, aluminum, railroads and computers. The increases for these firms during the third quarter ran as high as 300%. But not all companies have been posting such big profit increases this year. Laggards center on firms in the defense, telephone and trucking industries. These companies have posted either modest boosts or even outright declines.
THE NEW U.S.-CANADA TRADE PACT WILL PROVIDE HELP to both economies. The $150 billion annual trade flow seems sure to surge in the years ahead-once Congress and Canada's parliament vote their approval of the agreement. Under the treaty, binational trade will move even more freely than Europe's. All U.S. and Canada tariffs will be removed over a 10-year phase-out period. And it isn't just for manufactures, but for services, energy, and investing, permitting enterprises in these sectors to operate freely in both markets.
Canada's government won't object to U.S. takeovers of small firms. The U.S. will have assured access to Canadian fuels.
BUSINESS MAY GET A LIFT IN 1988 from bigger-than-expected tax refunds. Many experts think that taxpayers have been over-withholding on a big scale. They estimate an extra $35 billion in refunds will be paid back during 1988. That would be in addition to the windfalls taxpayers will be getting under the tax-reform law that Congress passed in 1986 perhaps another $35 billion.
The bigger refunds should add a little life to the consumer sector, which would be even more sluggish without refunds.
A TAXPAYER-PROTECTION MOVEMENT IS ACQUIRING MOMENTUM in the Congress. It now has 55 sponsors in the Senate, with more legislators coming on.