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To: NickSE who wrote (41340)	5/17/1999 12:12:00 PM
From: NickSE	Read Replies (1) of 86076

S&P OFFL: MAY BE 'SEVERE FIN'L DISRUPTION' IN US NEXT 2-5 YRS economeister.com HONG KONG (MktNews) - Inflated asset markets and growing financial leverage in the U.S. mean a correction is likely coming and there could be "severe financial disruption" within the next two to five years, according to David Beers, managing director for sovereign ratings at Standard and Poors rating service. Speaking Monday to a CLSA Global Emerging Markets conference, Beers said Federal Reserve rate cuts in 1998 gave impetus to the trend toward increased financial leverage. "Financial leverage has been growing for a few years," he said. "The asset bubble in the U.S. is showing some disturbing symptoms....It's still hard to believe there won't be some kind of correction." "Looking ahead, two years or five years, there could be some severe financial disruption that requires government intervention." However, he stressed this would be unlikely to impact the U.S.'s AAA sovereign standing, and would more likely hit corporate ratings. From a sovereign perspective, "it's fortunate this is happening at a time when government finances have so substantially improved," Beers said.

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