December 8, 1994

Orange County's Bankruptcy The municipal bond market was roiled after Orange County, Calif., sought bankruptcy. The wealthy county's filing threatens to raise borrowing costs for other local governments. And some Wall Street firms may face losses and lawsuits. [ Page D1. ] Other local governments face problems with risky interest-rate investments. But Orange County's troubles may be on a different scale: its $20 billion investment pool is bigger than most and its investments were far more aggressive. [ D1. ]

In an unusually clear signal that the Federal Reserve will continue raising interest rates, its chairman, Alan Greenspan, said today that inflation might rise soon and that the economy was continuing to grow briskly. The Federal Reserve has sought with six rate increases since February to brake economic growth in an effort to forestall inflationary shortages of goods and skilled workers. Mr. Greenspan told members of the Congressional Joint Economic Committee that "there is very little evidence throughout this economy of any degree of slowdown,"

The sudden plunge of Orange County, Calif., into bankruptcy shook the market for public borrowing across the country yesterday, threatening to make it more expensive for many localities to borrow. It also left some Wall Street firms facing the potential of big losses. And it served as a warning of how rapidly new and popular financial strategies can sour, leaving an apparently prosperous county unable to pay its bills.

For the third time in less than a year, the United States Patent Office has invoked a rarely used power to revoke a broad patent after a strenuous industry protest. The agency notified Agracetus, a W. R. Grace & Company subsidiary in Wisconsin, last week that it had canceled two patents entitling the company to royalties on virtually any type of genetically engineered cotton produced in this country.

Tipping a Stocking Cap . . . to Dickens, The Home Seciton offers holiday gifts that celebrate the humble and the grand, in settings to match. Homey objects are shown in the atmospheric rooms of the lower East Side Tenement Museum, in a building where more than 1,000 families from 20 nations lived and struggled from 1863 to 1935. The 1765 Morris-Jumel Mansion, New York's oldest surviving residence, is a splendid backdrop for gifts noble in spirit, if not always in price. SUZANNE SLESIN