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One hundredfive years of edfitorilfreedom
Thursday
February 1., 1996
t 0. 0~
Iterest
rates cut
by Federal
Reserve
Stock market soars as
bank lending rates
drop once again
WASHINGTON (AP) - The Fed-
eral Reserve cut interest rates for the
second time in two months yesterday,
hurrying to the rescue of a faltering
onomy. Major banks immediately
reduced their own lending rates, mean-
ing lower borrowing costs for millions
of Americans.
The stock market, which had surged
on Tuesday in anticipation of the Fed's
credit relief, set another record yester-
day. The Dow Jones industrial average
closed at 5,394.94, up 13.73.
Private analysts said further rate re-
ductions were likely as the Federal Re-
serve tries to stave off recession.
i The Fed said it was cutting its target
for the federal funds rate, the interest
that banks charge each other on over-
night loans, from 5.5 percent to 5.25
percent. It also reduced its largely sym-
bolic discount rate, the interest it charges
on direct loans to banks, to 5 percent.
The actions should stimulate eco-
nomic activity by lowering the cost of
credit. But the Fed's statement said
erely that the reductions could be
ade because "moderating economic
expansion in recentmonths has reduced
potential inflationary pressures."
Chase Manhattan was the first major
bank to announce a cut in its prime rate,
and other banks quickly followed suit.
The prime rate, the benchmark formany
business and consumer loans, was cut
to 8.25 percent from 8.5 percent.
Private economists, who had been
urging the central bank to act, said they
relieved yesterday's reduction in the
funds rate, the third since July, would
not be the last.
"Given how soft the economy is, we
are going to see more easing," said
Lawrence Chimerine, chief economist
at the Economic Strategy Institute in
Washington. "The Fed overtightened a
year ago and they have been moving
too slowly to reverse that. We have a
threat of a recession."
0 The central bank from February 1994
to February 1995 was increasing inter-
est rates, doubling the funds rate from 3
percent to 6 percent in an effort to slow
the economy to keep inflation in check.
The economy did slow. But when the
Fed's hoped-for "soft landing" threat-
ened to turn into something worse, the
central bank reversed course and trimmed
the funds rate by a quarter point last July.
While many economists expected a se-
es of rate cuts, the central bank waited
ntil December to trim again.
The Clinton administration, which is
hoping for a strong economy in this
See ECONOMY, Page 2A
Explosion rocks Sri Lankcapital
COLOMBO, Sri Lanka (AP) - In one of
the worst attacks in Sri Lanka's 12-year civil
war, a truck packed with explosives rammed
into the central bank yesterday, igniting tower-
ing fires in the business and tourist district. At
least 53 people died, including the driver, and
1,400 were wounded.
Authorities blamed the attack and a fireball
caused by a rocket-propelled grenade moments
earlier on the Tamil Tiger rebels, whose 12-
year armed campaign for an independent home-
land has killed nearly 40,000 people. There
were no immediate claims of responsibility.
In the chaos after the midday attack, dozens
of people were trapped atop burning buildings
waving for help. Helicopter gunships bristling
with machine guns tried to pluck survivors
from rooftops but were repelled by the heat.
Many were rescued by ladders; those on the
streets were taken away in public buses and
private cars.
As darkness fell, soldiers armed with assault
rifles patrolled the center of Colombo, and
drizzling rain forced rescuers to scale back
their hunt through unsteady buildings for bod-
ies and survivors.
The director of the National Hospital's
trauma unit, Hector Weerasinghe, told The
Associated Press that 53 people died. An addi-
tional 1,060 injured people were admitted to
two hospitals, 100 in critical condition. Scores
of people released after treatment raised the
estimated number of injured to 1,400.
Most of the dead and wounded were in the
Central Bank building, where Sri Lanka's gold
reserves are held and the country's financial
policy is made.
Bank guard Prasanna Wijewardhana said a
blue truck with three men drove into the secu-
rity barricade outside the bank. Two men leaped
out and started firing automatic weapons.
Some guards returned fire, but many of them
fled, Wijewardhana said. The attackers "had
the advantage of surprise," he said.
During the gunfire, a rocket-propelled gre-
nade landed in front of a nearby office build-
ing, gouging a crater and shattering windows
at The Associated Press office 100 yards away.
Police said the driver of the truck died in the
explosion. Hours later, they arrested two oth-
ers seen fleeing with automatic rifles about a
mile from the blast.
The bank building burst into flames, which
spread to a half-dozen other buildings. The
fires raged for much of the day and thick black
smoke blanketed the city, hampering rescue
See SRI LANKA, Page 2A
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AP PHOTO
A colleague consoles an unidentified photographer (left)
whose father is feared to be a victim in the bomb explosion
in Colombo, Sri Lanka, yesterday.
I
MSA to recommend
students to serve on
advisory search panel
By Laurie Mayk
Daily Staff Reporter
Michigan Student Assembly President Flint
Wainess will present the assembly's recom-
mendations for the presidential search
committee's two student representatives at a
meeting tomorrow with Provost J. Bernard
Machen.
"Hopefully we'll come to an agreement on
names to forward to the regents," Wainess said.
The University Board of Regents announced
last month that it will include two students on the
advisory search panel - a
committee that will meet in ~--.......
closed session to consider
candidates for University
president.
Machen said that although
the assembly's opinion will
be considered, he has solic-
ited nominations across cam-
pus for one undergraduate
and one graduate student rep-
resentative and expects to.W
continue deliberations after
tomorrow's meeting.
"They are not going to select the candidates,"
Machen said. "I will select the candidates.
"I'll probably interview a number (of student
candidates) before I make a final recommenda-
tion," he said.
Machen said he plans to make his recommenda-
tions to the regents in mid-February.
Wainess, who has been working with the re-
gents and Machen to communicate student con-
cerns about the search, said he expects no prob-
lems reaching an agreement on the recommenda-
tions.
"MSA will be united behind this (recommen-
dation)," said LSA Rep. Probir Mehta, campus
governance committee chair. "We've already
started soliciting a lot of people ... who are
interested."
CGC is responsible for appointing students to
various leadership positions on University and
city-wide committees.
Mehta said CGC and Wainess will collaborate
to choose the two "MSA-endorsed" students to-
day. Machen, Wainess and Mehta have been
accepting e-mail applications since the regents
announced their plan for student involvement
earlier this week. A list of student leaders used in
appointing MSA committee chairs this fall has
also been a resource for recruiting students, Mehta
said.
"People are talking about this (search) on
the streets and at the libraries," LSA Rep.
Fiona Rose said. "They're really interested
in who will be at the helm of the University
next year.
MSA is not the only source for nominations,
Machen said. He is .keeping a record of the
nominations he has received, currently 15 to 20
student names, and the individbuals or group mak-
ing the nomination. Machen said MSA is the only
student group to request a meeting with him as of
yet.
The assembly was expecting more student
representatives on the committee and more MSA
involvement in the search, Mehta said.
"We're slightly disappointed that MSA didn't
get appointment powers to this committee," he
said.
Although the search committee meetings will
be confidential, Mehta said he hopes the selected
students will keep the lines of communication
open.
"They won't be able to say anything but we can
tell them, 'You'd better listen to student concerns
here,"' he said.
Wainess said he expects MSA to play a more
active role later in the search process.
"When the regents publicly receive the nomi-
nations of the advisory committee, MSA should
play a strong role in commenting on those candi-
dates," Wainess said.
MARK FRIEDMAN/Daily
Sorry, sad anld sulking
Maurice Taylor looks downcast as Michigan falls to Purdue last night, 80-59. The blowout was
the worst the Wolverines have suffered at home since the 1984-85 season.
Students' Party slate
-ump-starts MSA race t
SAPAC celebrates 10
years of programming
By Laurie Mayk
Daily Staff Reporter
Nearly two months before election
day, the Students' Party announced its
presidential slate Tuesday - kicking
off the Michigan Student Assembly's
winter '96 election season.
Jonathan Freeman, MSA Interna-
tional Student Affairs Commission
chair, and LSA Rep. Olga Savic are the
party's nominees for MSA president
and vice president respectively.
The first team to announce its candi-
dacy, the ticket's vice presidential candi-
date was a little reluctant to compete for
the position, Freeman said.
"Becoming president or vice presi-
ent was never part of the grand
scheme," Savic said.
Savic said frustrations with the inter-
nal workings of the assembly prompted
her candidacy, after almost prompting
her departure from the assembly.
"If you leave, you're giving up," she
said. "And I don't believe in giving up."
gan Party administration, led by MSA
President Flint Wainess and Vice Presi-
dent Sam Goodstein, of stifling mem-
bers with unpopular ideas and creating
the "frustrating" environment that had
alienated Savic.
"MSA should be an exchange for
ideas and empowering people when it's
used right," Freeman said. "The presi-
dent should be helping the assembly,
whether he agrees or disagrees."
"A real leader listens to what's going
on and lets that shape what direction
we're going to take," Savic said.
Wainess questioned Freeman and
Savic's abilities to generate those ideas.
"Students want a reasonable, not a
radical approach to student govern-
ment," Wainess said. "Students want
ideas, not ideology. Jonathan and Olga
bring only ideology, not ideas."
Wainess also criticized the Students'
Party for the early release of its slate.
"It's wasteful," he said. "It impedes
good governance when people are poli-
JOE WESTRATE/Daily
Jonathan Freeman and Olga Savic, LSA Juniors, declared their candicacy yesterday
as the Students' Party's presidential slate for the upcoming MSA election.
By Rajal Pitroda
For the Daily
Eleven years ago, a group of Univer-
sity students launched a sit-in in what is
now the Office for Student Affairs. Their
mission-to heighten awareness of the
safety concerns of women on campus
and to make apparent the need for a rape
crisis center.
Their request led to the formation of
the Sexual Assault Prevention and Aware-
ness Center, which opened its doors as a
source ofprevention, education and coun-
seling to the University community.
February marks the beginning of
SAPAC's 10th-anniversary celebration.
The anniversary's highlight comes
with rape prevention month in March
with a keynote address by author Evelyn
White. White, who wrote a book for
black women in abusive relationships,
will lecture on feminist issues.
"We are very excited to have Evelyn
White come to speak," SAPAC director
Debi Cain said. "She carries with her
some very powerful words."
"We want to continue our efforts to
expand throughout the year," said Joyce
Wright, SAPAC prevention education
coordinator. "Overall, our goal has been
and will continue to be an effort to
eradicate these problems."
SAPAC began 10 years ago as a peer
education and counseling program to
deal with sexual assault. Now, the orga-
nization conducts workshops for inter-
ested students in residence halls, class-
rooms and Greek houses.
These workshops attempt to heighten
awareness of problems that face students,
and to provide them with possible solutions.
SAPAC also has a 24-hour crisis line
and outreach program, in which teams of
two volunteers provide counseling to
victims of sexual assault. "They provide
victims with information on their rights
and options, and are there with them as
long as the survivor needs," Wright said.
SAPAC also sponsors Safewalk and
Northwalk, which provide nighttime
walking services to students.
"I wanted to do something that was
the University has taught her that al-
though there "are other ways than MSA
to help students," an official position
on the assembly may be the most effec-
tive way to do so.
"It's not always possible if you don't
have some measure of power within the
organization," Savic said.
Freeman, an LSA junior experienced
representative," Goodstein said.
The executive power of the president
and vice president needs to be used to
support student groups on campus in
any weather, Freeman said.
"Our vision is that student services
need to be supported - continually
they are helped when they are in trouble
and then forgotten," Freeman said.
I