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Weekend Report: Chinese Trust Going Bankrupt, Imperiling Foreign Debts

Plus, central bankers gather in Hong Kong, Silicon Graphics readies a less-expensive line and Minas Gerais stays vexing.

With earnings reports and the full-blown start of

President Clinton's

impeachment trial set to dominate the news this week, an ominous item from the weekend news suggests that the world's economic problems may sneak in the back door to grab a little attention.

Guangdong International Trust & Investment Corp.

of China plans to file for bankruptcy, with the trust's 135 foreign creditors to receive no priority treatment in the repayment of more than $4 billion in debt. Creditors include

Merrill Lynch


Bank of Tokyo-Mitsubishi

. A


story on the pending liquidation described GITIC trustees as "shrugging off the impact on China's future credit stance." We'll see if the markets shrug as well.

Meanwhile, central bankers from 17 economies are preparing for a wide-ranging meeting at the Hong Kong office of the

Bank for International Settlements

. Most of the bankers are from the Asia-Pacific region, but

Federal Reserve


Alan Greenspan


European Central Bank


Wim Duisenberg

are in attendance as well. The confab started Monday morning in Hong Kong.

Over in Japan,

Liberal Party


Ichiro Ozawa

criticized the ruling

Liberal Democratic Party

for dragging its feet on major issues that would clear the path toward a Liberal-LDP alliance. Still, Ozawa continues to expect the issues to be resolved in time for a cabinet reshuffling ahead of the Jan. 19 start of the ordinary



In Tokyo, the

Nikkei 225

average was trading lately down 111.07, or 0.8%, at 13280.74

Continuing to endear itself to markets around the world, the Brazilian state of Minas Gerais followed up on last week's suspension of payments on $15 billion in debt to the federal government by warning that it will pay upcoming Eurobond obligations only after meeting local financial needs. "If we have money after paying for state workers' salaries and paying for our prisoners' food, then no problem," Minas Gerais Gov. Itamar Franco said.

In corporate news,

Silicon Graphics


said it plans to introduce on Monday a line of low-priced, high-powered workstations. The computers will be priced at $3,000 to $6,000 but will perform many of the same functions as Silicon Graphics' $25,000 models.

The machinations in the European luxury-goods market continue, with

LVMH Moet Hennessy Louis Vuitton


poised to announce it holds 20% of



, according to Italian newspaper

Il Sole

. LVMH previously acknowledged that it holds more than 5% of Gucci. The paper said LVMH is unlikely to launch an immediate takeover bid for Gucci because the high price -- $4 billion or more -- is prohibitive.

In Japan,


plans to stop making DRAM chips by the end of the year, focusing instead on more profitable products like high-performance chips for servers and flash memories for cellular phones. The news could affect U.S. DRAM makers like

Micron Technology

(MU) - Get Free Report


In the offing this week are earnings reports from such luminaries as


(INTC) - Get Free Report






(AAPL) - Get Free Report

. And as the market's Internet frenzy continues, Wall Street will pay close attention to this week's IPO of

, the financial news Web publishing joint venture of


(CBS) - Get Free Report


Data Broadcasting



In the Papers


Up & Down Wall Street column turns its spotlight on

Duane Reade

(DRD) - Get Free Report

, the New York-based drugstore chain. The column says Duane Reade is "being hailed as a great turnaround story and likely buyout target," but it further notes that "it's far from a sure thing that the company would go out at a premium valuation."



says French oil-service company

Bouygues Offshore

(BWG) - Get Free Report

"looks cheap" at current prices. The paper focuses on the prospects of change-redemption company


(CSTR) - Get Free Report


The paper also includes a pullout section on mutual funds, summing up fourth-quarter performance and profiling pension giant


, which is a growing presence in the mutual-fund industry through six funds open to the general public.

The New York Times

also ran its fourth-quarter report on mutual funds this weekend, profiling

(LMVTX) - Get Free Report

Legg Mason Value Trust manager William Miller. The fund has beaten the

S&P 500

in each of the last eight years.

The headline on Gretchen Morgenson's Market Watch column declares that "The Oil Patch Shows Signs of New Life," with crude prices up 26% in the last three weeks. An oil expert says

Atlantic Richfield

(ARC) - Get Free Report






(UCL) - Get Free Report

are three of the best values in oil.

As originally published, this story contained an error. Please see Corrections and Clarifications