October 25, 1994

Sometime before this year ends, the Securities and Exchange Commission plans to enact new regulations to change the way bonds are traded in the municipal bond market, where the nation's cities and towns go to borrow money. The proposed changes would modernize a market that many say is closer to the 19th century than the 21st: Right now, it is difficult for the buyers of municipal bonds to get financial data on municipal issuers, to find current bond prices and to know dealers' profits.

Mayor Rudolph W. Giuliani and the leaders of New York City's municipal labor unions reached agreement yesterday on a plan to cut 7,600 more jobs from the city's payroll by offering a second round of severance packages as an alternative to layoffs. The Mayor and the unions, who announced the deals at City Hall last night, also agreed on ways to save $190 million in the cost of health care for city workers -- a concession that Mr. Giuliani had sought earlier in the year but that the unions resisted until now. While that is a one-time saving to be accomplished by tapping health reserves, both sides agreed to various changes in benefits expected to save a further $100 million a year starting next year.

A ruptured pipeline in the Russian Arctic has spilled two million barrels of hot oil, soaking the fragile permafrost and posing potentially major environmental damage to the region, according to reports received by the Federal Department of Energy. William H. White, the Deputy Secretary of Energy, said yesterday that the pipeline leak was months old, but that a dam that was jury-rigged by a Russian oil company to contain the leaking oil apparently burst in the last several days. He said that American industry officials in the remote Komi region of the Arctic reported that the spill had reached a tributary of the Pechora River, near the city of Usinsk, which in warmer months pours into the Arctic Ocean. The spill is continuing to advance, he said.

Children lie on filthy hospital beds, murmuring in pain as they die of diarrhea and pneumonia. Some of the Arab world's finest artists peddle their work for as little as $12 a painting. A 50-year-old retired policeman, victim of a stroke a year ago, limps from merchant to merchant in a food market looking for what he can afford on a pension driven down by inflation to the equivalent of $2 a month, barely enough to buy one chicken. In this city, which only five years ago ranked as one of the most vibrant and prosperous capitals of the Middle East, the plight of Iraq is amply evident, but political improvement is not. Gone are the mounds of imported goods, sweets, pistachios and varied nuts that were a fixture of many Baghdad street markets. They have been replaced by spontaneous flea markets where sullen middle-class men and women offer their cutlery, used furniture and family possessions for sale to make ends meet.

Federal Reserve officials, struggling to hold down long-term interest rates in the United States, are increasingly convinced that an unusual convergence of global trends may keep rates high around the world for the next several years. They and officials at the Treasury Department note that Western Europe and Japan have begun moving simultaneously out of recessions while output in many developing countries expands briskly. In growing economies, the demand for capital to invest in new factories or homes tends to outstrip growth in the money available for lending. This pushes up interest rates as people compete to borrow money.