Business Notes AUCTIONS

You can't keep a Texan down. Only last week John Connally, the bankrupt former Governor, auctioned off personal belongings ranging from saddles to paintings for $2.75 million. That is only a fraction of the $48.75 million that Connally's failed real estate empire still owes. But Connally may have a ! promising new job lined up. An old friend, Edward Bennett Williams, the high- powered Washington lawyer, is said to be thinking of inviting him to join his law firm.

Connally has already found other work as well. Houston's University Savings, the state's fourth largest thrift, has cast the former Treasury Secretary in commercials promoting financial prudence. In the ads, scheduled to debut on Texas TV stations during the Super Bowl, Connally says that though he and his wife Nellie "worked hard all of our lives . . . things haven't quite worked out like we'd planned. But that's all right," he drawls, "because there's no better place than Texas to start over and save a little."

Connally's homily about Texas' being a great place to save may ring a bit hollow to another Houston institution, First City Bancorp. The company disclosed last week that it expects to post a 1987 loss of $1.1 billion, among the biggest ever for a U.S. bank.