Newspaper article THE JOURNAL RECORD

Foreign Capital Helps U.S. Economy

Newspaper article THE JOURNAL RECORD

Foreign Capital Helps U.S. Economy

Article excerpt

Foreign Capital Helps U.S. Economy WASHINGTON _ Foreigners' growing investment in the United States has helped the U.S. economy on balance with little negative effect, the Commerce Department said Friday. Foreign-owned affiliates in the United States doubled their share of the U.S. economy between 1977 and 1981 and held a steady 4 percent share through the rest of the 1980s, Undersecretary Michael R. Darby told Congress' Joint Economic Committee.

"U.S. affiliates of foreign firms seem to have goals similar to U.S.

residents and companies and, in fact, on average tend to spend more on plant and equipment, research and development and worker compensation than U.S. firms generally," Darby said. On balance, Darby said, "The United States has greatly benefited from the large inflow of capital from abroad during the 1980s." Without foreign capital, total investment in the United States would have been somewhat lower, resulting in reduced economic growth during the decade, he said.

Fixed-rate Mortgages Average Near 14-year Low WASHINGTON _ Fixed-rate mortgages averaged 8.95 percent this week, the lowest rate in nearly 14 years, according to a national survey released Friday by the Federal Home Loan Mortgage Corp.

The rate, down from 9.02 percent last week, was the lowest since December 1977, when it also was 8.95 percent. On one-year adjustable rate mortgages, lenders were asking an average initial rate of 6.83 percent, down from 6.87 percent last week and the lowest since Freddie Mac began tracking ARMs in 1984. The rates do not include add-on fees known as points.

Ford Raises Prices DETROIT _ Ford Motor Co. on Friday said prices for its 1992 cars and trucks would rise an average of 3.5 percent over comparably equipped 1991 models. The increase is 0.2 percentage points lower for cars and 0.4 percentage points lower for trucks than the pre-introductory prices Ford announced earlier this summer. Purchasers of vehicles bought under higher pre-introductory prices will be reimbursed for any difference. The prices announced Friday will be effective Sept. 26, the formal introduction date for Ford, Lincoln and Mercury cars and trucks.

3 British Conglomerates Launch Takeovers LONDON _ Three of Britain's most acquisitive conglomerates have launched takeovers worth a total of $4.5 billion this week, a burst that experts attribute to increased confidence in economic recovery. Although more offers are expected, the experts said Friday that the trend does not signal a return to takeover fever of the late 1980s. British takeovers have totaled 5 billion so far this year, compared with a peak of $48.2 billion in all of 1989, figures compiled by the British publication Acquisitions Monthly show. The new bids are largely financed by stock and generally make industrial sense for the bidders, as opposed to those driven by the availability of cheap bank loans and a desire to profit by breaking up takeover targets and selling the pieces. …

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