Clinton -- doomed & wagging, Japan collapses, Y2K bug, etc Message Board

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Politics : Clinton -- doomed & wagging, Japan collapses, Y2K bug, etc

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To: alan w who wrote (521)	10/2/1998 2:57:00 PM
From: SOROS	of 1151

USA Today - 10/02/98 World financial leaders meet Saturday to try to staunch rapidly eroding investor confidence and stock prices worldwide before they drive the U.S. and global economy into a damaging recession. Wall Street stock prices plunged again Thursday and Treasury bond prices surged as frightened investors dumped shares and fled to the safety of U.S. government securities. The Dow Jones industrial average plummeted 210 points to 7633 while the benchmark 30-year Treasury bond yield, which moves opposite to the price, fell to a record low of 4.88% from 4.96% Wednesday. The steep decline in the Dow, which has fallen 5.5% since Tuesday, capped a day of dramatic price drops from Tokyo to London to New York. Behind the markets' meltdown: fears that the world economy is spiraling downward and no one can stop it. Saturday's meeting brings together finance ministers and central bankers from the Group of Seven: Britain, Canada, France, Germany, Italy, Japan and the United States. It is the first in a series of meetings the next week on the crisis. Federal Reserve Chairman Alan Greenspan and Treasury Secretary Robert Rubin will represent the United States. Rubin warned Thursday that the crisis is far from over. "The world is going to have to work through these problems for some time to come," he said at a conference in New York. He urged Japan to act swiftly to fix its recession-riddled economy, saying that was critical to ending the crisis. He also pledged U.S. support for Brazil, the largest economy in Latin America and the next potential victim of the turmoil that began 15 months ago in Asia. Investors took little comfort from Rubin's remarks, and experts say it will take dramatic actions rather than words to restore market confidence. Tuesday's quarter-percentage point cut in short-term interest rates by the Federal Reserve is now viewed by the markets as too little given the immensity of the world's economic problems. International Monetary Fund chief Michel Camdessus sought to reassure investors Thursday by saying he expects the U.S. central bank to cut rates further. In testimony to Congress, Greenspan gave no hint of the Fed's plans. Instead, he was peppered with questions about the Fed's role in helping coordinate a bailout of a huge hedge fund speculator. Greenspan said the Fed acted because the financial markets are so fragile. In a sign of the stresses facing the system, the Fed said Thursday that major banks are clamping down on loans to global companies.

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