December 13, 1990

The Bush Administration has been quietly shoring up the troubled Bank of New England, placing more than $1 billion of public money in the Boston bank after billions were withdrawn by depositors who were worried about the institution's rising losses from bad loans. The Treasury Department routinely deposits in commercial banks Federal funds from personal and corporate taxes as well as operating cash. Hundreds of financial institutions act as Federal depositories through these "tax and loan accounts," which the Treasury says are "blindly" placed.

From their wraparound redwood deck, Sally and Ron Zamarin have a clear view of the white water at Zuma Beach directly below, the dolphins out in the Pacific and even the West Channel Islands. Nestled in a private, gated 93-acre community, the Zamarins' new home is a cocoon of seafoam green with three bedrooms, three bathrooms, a walk-in wine cellar, skylights and Mexican tile floors. In Malibu, it might be just another beach house, except that it happens to be a triple-wide mobile home, model year 1970.

THE ECONOMY The Administration has been quietly shoring up Bank of New England, depositing more than $1 billion of public money in the troubled bank after billions were withdrawn by depositors. [ Page A1. ] The clouded economic outlook is forcing G.M. and Ford to trim sales projections. Dividends are in question. [ D1. ] The Defense Department's top acquisition official resigned under pressure, eight days after a Pentagon inquiry. [ B12. ] The Senate Ethics Committee heard closed-door testimony from a witness who knows perhaps more than anyone about Keating's relationship with five Senators under investigation. [ B18. ] COMPANIES CBS offered to buy back about 44 percent of its stock for $190 a share, or about $2 billion. CBS stock jumped 5 5/8, to 175 1/2. [ D1. ] A.T.&T. and MCI announced a truce in their 14-month battle over methods they use to sign up residential customers. [ D1. ] Lehman Bros. executives reportedly plan to change their compensation system to resemble a partnership. [ D2. ] A Delaware judge said Shell Oil must pay $110 million to 1,000 of its former shareholders. [ D2. ] Digital Equipment stock jumped more than 4 percent after the company confirmed a big cost-cutting program. [ D4. ] Delta has begun a promotion under which frequent fliers can earn a free trip for making two round trips. [ D4. ] Attorneys general in six states have filed suit against GMAC Mortgage, accusing the lender of overcharging consumers. [ D5. ] Columbia Savings filed a multibillion-dollar lawsuit against a number of Drexel executives. [ D5. ] Regulators announced that Coopers & Lybrand had agreed to revise its auditing procedures as part of a settlement. [ D7. ] MGM-Pathe said it would delay by about a month making interest payments of about $25 million on "junk bonds." [ D8. ] Hitachi and Nissan announced a joint venture to make telephones and navigation systems for vehicles. [ D4. ] An effort by The Daily News and its unions to find common ground collapsed after talks in Washington. [ B3. ] INTERNATIONAL OPEC ministers have agreed to restore output quotas once the Persian Gulf crisis is over. [ D1. ] President Bush moved to help Moscow meet winter shortages by approving up to $1 billion in Federally guaranteed loans. [ A1. ] MARKETS Oil prices fell below $26 to the lowest level since Aug. 3, the day after Iraq invaded Kuwait. [ D2. ] Stocks gained in heavy trading after the CBS buyback offer, with the Dow jumping 36.14, to 2,622.28. [ D10. ] Prices of Treasury notes and bonds rose and interest rates dipped. [ D15. ] New York City was able to sell more than $1.1 billion in long-term bonds, but the price to the city was high. [ B1. ] Grain and soybean futures closed mostly higher in anticipation of the granting of export credits to the Soviet Union. [ D18. ] The dollar drifted lower. [ D18. ] TODAY'S COLUMNS The negotiated settlement a judge hopes to use for Eagle-Picher is an unpopular one. Talking Deals. [ D2. ] Eurocom agreed to buy the 49 percent stake in HDM's lucrative European agency network held by its partners in the venture, Y.&R. and Dentsu. Kim Foltz: Advertising. [ D8. ] As more corporations default on "junk bonds," the temptation grows to search for bargains. Floyd Norris: Market Place. [ D10. ]

John Gotti became America's most powerful Mafia crime boss after participating in the midtown Manhattan execution of his predecessor, Paul Castellano, five years ago, prosecutors charged yesterday. A Federal indictment, for the first time, placed Mr. Gotti near the scene of the killing by asserting that on the day it occurred, Dec. 16, 1985, Mr. Gotti "went to the vicinity" of Sparks Steak House, on East 46th Street near Third Avenue in Manhattan. Mr. Castellano and a bodyguard were shot to death as they emerged from their car in front of the restaurant.

Sarah Phillips thought she was seeing a ghost of Christmas past. Standing in a crowded aisle at Toys "R" Us in Manhattan, she was staring at a pudgy, funny-looking doll with no chin, balloon-like cheeks and close-set blue eyes bursting with surprise. Printed on the box was a name that once made toy history: Cabbage Patch. "I can't believe it," said Ms. Phillips, who was shopping for toys for her two young daughters. "I didn't know this was still around."