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earlier this year japanese investors snapped up a similar $ N million mortgage-backed securities mutual fund

that fund was put together by blackstone group a new york investment bank

the latest two funds were assembled jointly by goldman sachs & co. of the u.s. and japan 's daiwa securities co

the new seven-year funds one offering a fixed-rate return and the other with a floating-rate return linked to the london interbank offered rate offer two key advantages to japanese investors

first they are designed to eliminate the risk of prepayment mortgage-backed securities can be retired early if interest rates decline and such prepayment forces investors to <unk> their money at lower rates

second they channel monthly mortgage payments into semiannual payments reducing the administrative burden on investors

by addressing those problems mr. maxwell said the new funds have become extremely attractive to japanese and other investors outside the u.s.

such devices have boosted japanese investment in mortgage-backed securities to more than N N of the $ N billion in such instruments outstanding and their purchases are growing at a rapid rate

they also have become large purchasers of fannie mae 's corporate debt buying $ N billion in fannie mae bonds during the first nine months of the year or almost a <unk> of the total amount issued

james l. <unk> <unk> executive vice president was named a director of this oil concern expanding the board to N members

ltv corp. said a federal bankruptcy court judge agreed to extend until march N N the period in which the steel aerospace and energy products company has the exclusive right to file a reorganization plan

the company is operating under chapter N of the federal bankruptcy code giving it court protection from creditors ' lawsuits while it attempts to work out a plan to pay its debts

italian chemical giant montedison <unk> through its montedison acquisition n.v. indirect unit began its $ <unk> tender offer for all the common shares outstanding of erbamont n.v. a maker of pharmaceuticals incorporated in the netherlands

the offer advertised in today 's editions of the wall street journal is scheduled to expire at the end of november

montedison currently owns about N N of erbamont 's common shares outstanding

the offer is being launched <unk> to a previously announced agreement between the companies

japan 's reserves of gold convertible foreign currencies and special drawing rights fell by a hefty $ N billion in october to $ N billion the finance ministry said

the total marks the sixth consecutive monthly decline

the <unk> downturn reflects the intensity of bank of japan <unk> intervention since june when the u.s. currency temporarily surged above the N yen level

the announcement follows a sharper $ N billion decline in the country 's foreign reserves in september to $ N billion

pick a country any country

it 's the latest investment craze sweeping wall street a rash of new closed-end country funds those publicly traded portfolios that invest in stocks of a single foreign country

no fewer than N country funds have been launched or registered with regulators this year triple the level of all of N according to charles e. simon & co. a washington-based research firm

the turf recently has ranged from chile to <unk> to portugal

next week the philippine fund 's launch will be capped by a visit by philippine president <unk> aquino the first time a head of state has kicked off an issue at the big board here

the next province

anything 's possible how about the new guinea fund <unk> george foot a managing partner at <unk> management associates of <unk> mass

the recent explosion of country funds <unk> the closed-end fund mania of the 1920s mr. foot says when narrowly focused funds grew wildly popular

they fell into <unk> after the N crash

unlike traditional <unk> mutual funds most of these <unk> portfolios are the closed-end type issuing a fixed number of shares that trade publicly

the surge brings to nearly N the number of country funds that are or soon will be listed in new york or london

these funds now account for several billions of dollars in assets

people are looking to stake their claims now before the number of available nations runs out says michael porter an analyst at smith barney harris upham & co. new york

behind all the <unk> is some <unk> competition

as individual investors have turned away from the stock market over the years securities firms have scrambled to find new products that brokers find easy to sell

and the firms are stretching their <unk> far and wide to do it

financial planners often urge investors to diversify and to hold a <unk> of international securities

and many emerging markets have <unk> more mature markets such as the u.s. and japan

country funds offer an easy way to get a taste of foreign stocks without the hard research of seeking out individual companies

but it does n't take much to get burned

political and currency gyrations can <unk> the funds

another concern the funds ' share prices tend to swing more than the broader market

when the stock market dropped nearly N N oct. N for instance the mexico fund plunged about N N and the spain fund fell N N

and most country funds were clobbered more than most stocks after the N crash

what 's so wild about the funds ' frenzy right now is that many are trading at historically fat premiums to the value of their underlying portfolios

after trading at an average discount of more than N N in late N and part of last year country funds currently trade at an average premium of N N

the reason share prices of many of these funds this year have climbed much more sharply than the foreign stocks they hold

it 's probably worth paying a premium for funds that invest in markets that are partially closed to foreign investors such as south korea some specialists say

but some european funds recently have skyrocketed spain fund has surged to a startling N N premium

it has been targeted by japanese investors as a good long-term play tied to N 's european economic integration

and several new funds that are n't even fully invested yet have jumped to trade at big premiums

i 'm very alarmed to see these rich <unk> says smith barney 's mr. porter

the newly <unk> premiums reflect the increasingly global marketing of some country funds mr. porter suggests

unlike many u.s. investors those in asia or europe seeking <unk> exposure may be less <unk> to paying higher prices for country funds

there may be an international viewpoint cast on the funds listed here mr. porter says

nonetheless plenty of u.s. analysts and money managers are <unk> at the <unk> trading levels of some country funds

they argue that u.s. investors often can buy american depositary receipts on the big stocks in many funds these so-called adrs represent shares of foreign companies traded in the u.s.

that way investors can essentially buy the funds without paying the premium

for people who insist on jumping in now to buy the funds <unk> 's mr. foot says the only advice i have for these folks is that those who come to the party late had better be ready to leave quickly

the u.s. and soviet union are holding technical talks about possible repayment by moscow of $ N million in <unk> russian debts owed to the u.s. government the state department said

if the debts are repaid it could clear the way for soviet bonds to be sold in the u.s.

however after two meetings with the soviets a state department spokesman said that it 's too early to say whether that will happen

<unk> with the talks the state department said it has permitted a soviet bank to open a new york branch

the branch of the bank for foreign economic affairs was approved last spring and opened in july

but a soviet bank here would be <unk> unless moscow found a way to settle the $ N million debt which was lent to the country 's short-lived democratic <unk> government before the communists seized power in N

under a N law the johnson debt default act as amended it 's illegal for americans to extend credit to countries in default to the u.s. government unless they are members of the world bank and international monetary fund

the u.s.s.r. belongs to neither organization

moscow has settled <unk> debts with other countries in recent years at less than face value

the state department stressed the <unk> debts as the key to satisfying the johnson act

but the soviets might still face legal obstacles to raising money in the u.s. until they settle hundreds of millions of dollars in additional debt still outstanding from the world war ii <unk> program

in another reflection that the growth of the economy is <unk> off the government said that orders for manufactured goods and spending on construction failed to rise in september

meanwhile the national association of purchasing management said its latest survey indicated that the manufacturing economy contracted in october for the sixth consecutive month

its index inched up to N N in october from N N in september

any reading below N N suggests the manufacturing sector is generally declining

the purchasing managers however also said that orders turned up in october after four months of decline

factories booked $ N billion in orders in september nearly the same as the $ N billion in august the commerce department said

if not for a N N surge in orders for capital goods by defense contractors factory orders would have fallen N N

in a separate report the department said construction spending ran at an annual rate of $ N billion not significantly different from the $ N billion reported for august

private construction spending was down but government building activity was up

the figures in both reports were adjusted to remove the effects of usual seasonal patterns but were n't adjusted for inflation

kenneth <unk> economist for society corp. a cleveland bank said demand for exports of factory goods is beginning to <unk> off

at the same time the drop in interest rates since the spring has failed to revive the residential construction industry

what sector is stepping forward to pick up the slack he asked

i draw a blank

by most measures the nation 's industrial sector is now growing very slowly if at all

factory <unk> fell in september

so did the federal reserve board 's <unk> index

yet many economists are n't predicting that the economy is about to slip into recession

they cite a lack of imbalances that provide early warning signals of a downturn

inventories are closely watched for such clues for instance

economists say a buildup in inventories can <unk> cutbacks in production that can lead to a recession

but yesterday 's factory orders report had good news on that front it said factory inventories fell N N in september the first decline since february N

this <unk> to the soft landing scenario said elliott <unk> an economist at donaldson lufkin & jenrette securities corp

i do n't see any signs that inventories are excessive

a soft landing is an economic slowdown that <unk> inflation without leading to a recession

the department said orders for <unk> goods those intended to last fewer than three years fell N N in september to $ N billion after climbing N N the month before

orders for durable goods were up N N to $ N billion after rising N N the month before

the department previously estimated that <unk> orders fell N N in september

factory shipments fell N N to $ N billion after rising N N in august

shipments have been relatively level since january the commerce department noted