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To: baystock who wrote (40104)	9/7/1999 3:18:00 PM
From: John Hunt	Respond to of 116972

IMF to revalue gold, avoiding open-market sales << Under the plan, countries which owe the IMF money from past loans, such as Mexico, would buy IMF gold the day before loan payments are due and then repay the installment the next day with the same gold, sources familiar with the scheme told Reuters. The plan raises cash for the IMF because the fund values the gold on its balance sheet at about $46 an ounce. Since gold is actually worth about $255 an ounce, the transaction would net the IMF profits of about $209 an ounce, or about $2.1 billion. After selling the gold, the fund would return $46 per ounce back to its General Resource Account and then transfer the $2.1 billion in profits to a trust fund. The trust would invest the $2.1 billion and use the proceeds to fund both the HIPC debt relief initiative and ESAF. The new plan will likely appease the gold industry and lawmakers from U.S. gold producing states since the IMF's gold would probably never leave its vaults. >> ... full news article at ... biz.yahoo.com Accounting fun and games, IMF style.

To: baystock who wrote (40104)	9/8/1999 8:43:00 AM
From: Rarebird	Respond to of 116972

UK's FTSE 100 Drops after Surprise Rate Increase: LONDON, Sept 8 (Reuters) - The UK's FTSE 100 extended its early loss at midsession on Wednesday, after the Bank of England made a surprise quarter point rise in its key short term lending rate to 5.25 percent. With gilts falling and sterling advancing on the move, the blue chip equity index was down 55.36 points, or 0.9 percent, at 6254.2 by 1108 GMT, having been down just 28.3 points as the decision was announced at 1100 GMT. Declining issues moved up to a majority of some seven to three, with rate sensitive banking stocks such as Lloyds TSB (quote from Yahoo! UK & Ireland: LLOY.L) -- heavily exposed to the mortgage market -- helping lead the fall. A 3.8 percent fall in Lloyds wiped some eight points off the FTSE, while a two percent decline in mobile 'phone group Vodafone Airtouch (quote from Yahoo! UK & Ireland: VOD.L) -- whose high stock market rating heightens its rate sensitivity -- accounted for a similar degree of the decline. Among other bank stocks, there were losses of two percent or more in Barclays (quote from Yahoo! UK & Ireland: BARC.L), Abbey National (quote from Yahoo! UK & Ireland: ANL.L) and Royal Bank of Scotland (quote from Yahoo! UK & Ireland: RBOS.L). Analysts said the increase had caught the market on the hop, leaving investors to mull the significance of the move. One possibility was that by acting pre-emptively to stem inflation pressures, the Bank may be lessening the chances of future increases. However, there were also concerns that the increase may be just the first of several, in a policy squeeze that dampens domestic growth and stems the flow of investment funds into equities. ''The (BoE's) concerns of a tight labour market, world demand and a strong housing market come as no real surprise, but this decision means we will bring forward our expectation of the next rate rise from Q2 to Q1 next year,'' said Philip Isherwood, equity strategist at Dresdner Kleinwort Benson. ''This kneejerk market reaction will probably settle down a bit as people try to work out the precise scale of the Bank of England's concern,'' Isherwood said. ''The markets have adjusted to a degree to rising interest rates, but the question is whether the bond market gets unsettled and whether we should be pricing in a series of rate rises.'' The rate move dealt a blow to a market that was already struggling to make headway in the wake of a weak Wall Street close overnight and with a prospective mixed New York opening providing no immediately relief from the gloom. Dealers said overall UK share trading volume remained depressed, with cautious investors in no rush to commit new funds to the market. ''I am not getting any feeling that people really want to dive into this market,'' said one senior equity salesman. ''I think we will continue range trading, with a focus on sector rotation.'' Sector switching themes have been predominant in recent weeks, as economically sensitive cyclical stocks attract interest and highly-rated ''growth'' areas such as telecoms struggle to regain their former momentum. The net effect is that the FTSE 100 has been rangebound for months and currently trades near the middle of a band roughly between 6,000 and 6,600 in which it has been trapped for much of the year so far. Meantime worries over U.S. interest rates, never far from investors' minds, were stoked by reports that the International Monetary Fund believed timely rate rises were probably necessary to prevent the economy overheating. The IMF forecast U.S. growth of 3.7 percent this year but made it clear it was worried about high stock prices, low savings rates and the high dollar. (Note: this article is ''in progress''; there will likely be an update soon.)