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To: Rarebird who wrote (38941)	8/13/1999 8:33:00 AM
From: long-gone	Respond to of 116927

sniff, sniff, is there something in the air?

To: Rarebird who wrote (38941)	8/13/1999 9:44:00 AM
From: long-gone	Read Replies (1) \| Respond to of 116927

So, you figure GS has moved, & is trying to catch the rest of the shorts in a short squeeze?

To: Rarebird who wrote (38941)	8/13/1999 2:06:00 PM
From: Alex	Respond to of 116927

Volcker pushes forex reform By TIM COLEBATCH ECONOMICS EDITOR Before there was Greenspan, there was Volcker. At the head of the Federal Reserve from 1979 to 1987 sat a large, growling bear of a man, who feared no one and drove the United States economy into recession to end the age of double-digit inflation. Paul Volcker is still around, and in Sydney last weekend for the Reserve Bank's annual policy conference, still saying exactly what he thinks. And while some of his thoughts on the global financial crisis would have made the US Treasury and the International Monetary Fund wince, a few might also have sent shivers through his Reserve Bank hosts. The conference, ``Capital Flows and the International Financial System', naturally focused on the Asian turmoil, and reform of national and global financial systems. There was no argument on the need for transparent reporting and regulation in the borrowing countries, but the experts were far from a consensus on what, if anything, needs to be done to fix the global system. That is what gets Paul Volcker angry. The debate is cooling as the flattened economies slowly pick themselves up. But the costs will be immense - for Indonesia, cumulative losses by 2002 equivalent to 84per cent of its annual output, according to Dr David Gruen and Dr Stephen Grenville of the Reserve Bank - and no reforms have been put in place to stop it happening again. It is not that Mr Volcker is against the conventional solutions to repair the defects at the borrowers' end: stronger regulation, auditing and accounting standards, and transparency on all sides. They are ``worthwhile and desirable', he argues, but they will be evaded, and regulation will flag when it is most needed. These will not stop ``the seemingly repetitive, and perhaps increasingly severe, pattern of international financial crises'. Nor, in Mr Volcker's view, will the new consensus that, instead of flinging their financial markets wide open, developing countries should use capital controls to limit short-term inflows (a view the Reserve Bank strongly advocates). He, too, supports it, but views it as ``interior decoration rather than grand architecture'. The new global financial architecture, the former Fed chief argued, must focus on reform of the ``gravely flawed' exchange-rate system. Like many of us, Mr Volcker was stronger on the attack than in proposing solutions: for small open economies, he ruled out freely floating rates (``too volatile to be practical') and fixed rates (``no satisfactory currency to which to peg') without embracing any alternative. But he implied that authorities in the US, Europe and Japan should take responsibility for maintaining stability by better tracking their own institutions. One point he made is relevant to Australian policy makers. The crisis, he said, hit the very countries that had been seen as economic success stories, and therefore attracted capital inflows. ``As the funds flow in, the prospect of a healthy expansion becoming a bubble is all too real. Sooner or later something triggers an outflow, lenders run for the door, a financial crisis results, and all too often turns into a first- class economic debacle.' Australia is now the international flavor of the month. In 1998 its net private-sector debt soared by $25 billion (almost all owed by financial institutions) and net portfolio investment by $17 billion. Its foreign currency debt hit $205 billion, of which $82 billion was due within 90 days and $130 billion within a year. There are vital differences between Australia and Asia's tigers: our banks are sound, and much of the borrowing is by foreign-owned institutions. But there is also cause for vigilance. theage.com.au