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To: KM who wrote (37565)	1/16/2000 3:29:00 PM
From: dclapp	Read Replies (1) \| Respond to of 99985

scary. eom.

To: KM who wrote (37565)	1/16/2000 3:39:00 PM
From: Crimson Ghost	Respond to of 99985

BIS Banker Warns on Markets Excerpt from Financial Mail on Sunday By Alex Brummer, January 16, 2000 "Stock markets around the world are almost certainly overvalued, according to Andrew Crockett, head of the Bank of International Settlements. In an interview with Financial Mail, Crockett, who also heads the Global Stability Forum, said he believed there was a possibility that 'there will be a correction'. His concern was to make sure that financial institutions were not so exposed as to be 'placed in jeopardy and risk a broader financial meltdown' Crockett believed that most financial institutions were reasonably well capitalised and supervised 'and able to withstand a correction'. But he was concerned when, as now, 'markets get out of balance'. He also warned that the high level of the US current account deficit and the associated low level of savings 'is not indefinitely sustainable'. The task of central banks was to help a smooth adjustment and not wait until the markets became volatile." Far from being some kind of financial apocalypse nut, Andrew Crockett is the head of one of the world's wealthiest and most powerful international financial institutions (see background below). Anyone who doesn't take his warning seriously is the nut. About the BIS The Bank for International Settlements, Basel, Switzerland, is the "Bankers' Bank". It was established at the Hague Conference in January 1930 in connection with Germany's war debt payments under the 1929 Young Plan. It also acts as a forum for international meetings, a centre for financial research, and helps implement international financial agreements. The BIS is essentially a gold-based central bankers' bank, which acts as clearing-house for the balance of payments between countries. From the report on "Earmarked Gold in Canada, 1935-56" by the Bank of Canada: "The Bank for International Settlements (BIS) was a Swiss-based legacy of World War I. It had been established in 1931 in Basle to oversee the reparation payments agreed to by Germany after the war. All of the European central banks contributed to its establishment and were represented on its board. In effect, the BIS became the central bankers' central bank. Although Germany never fulfilled all its reparations commitments, the BIS remained active in interbank and various commercial transactions...

To: KM who wrote (37565)	1/16/2000 4:12:00 PM
From: Les H	Read Replies (2) \| Respond to of 99985

WILL FOMC DIRTY WORK DELAY GREENSPAN?S ?INEVITABLE? CONFIRMATION? ?Stan Wilson The juxtaposing of two dates may foreshadow more trouble for the confirmation of Alan Greenspan to another four years as Federal Reserve chairman than many Fed watchers are predicting. On Jan. 26 the Senate Banking Committee will hold a hearing on his confirmation (probably a ?love fest?, one committee aide quipped). But only six days later, the Federal Open Market Committee meets to begin what financial markets are widely assuming be the markedly less-festive task of pricking the financial asset price bubble with a new round of rate hikes. In an election year, the resulting Wall Street jitters could chill some of the enthusiasm of politicians for four more Greenspan years. That the Fed chairman should fail to be confirmed is, by all accounts, unthinkable. Last week a staffer for one senator who takes a dim view of Greenspan?s tenure quoted his boss as saying, ?we only got seven votes last time. We will probably get 10 votes this time.? But three-and-a-half years ago, during Greenspan?s last Senate confirmation, opponents were successful in delaying floor action for three months. Along the way, his term as chairman expired and Fed governors had to meet and elect him chairman pro tempore because it was unclear whether the statute would let him continue to serve otherwise. With the notable exception of Sen. Tom Harkin, reservations about Greenspan were kept muffled when the White House announced his nomination last week. Another some-time critic, Sen. Harry Reid, D-Nev., was out of the country. And queries on this subject to the offices of Sens. Kent Conrad and Bryan Dorgan, both North Dakota Democrats, went unanswered Harkin, however, said in a statement, ?frankly, I believe the Fed is all-too-ready to increase rates again in February with no sign of accelerating inflation in sight. This would be an unneeded tax on American consumers and stifle economic growth.? And, in what might be interpreted as a loaded statement by those who remember Greenspan?s last confirmation, Harkin added that he looks forward to ?another good debate? on the Fed?s monetary policy. Last time, it was Harkin?s insistence on a floor debate about monetary policy that forced a prolonged delay of the nomination and ultimately led the Senate leadership to cave in to the Iowa Democrat and allow three days of debate on the subject. JOINED AT THE HIP? Fed watchers pointed to another potential complication. The Clinton Administration may reconcile itself to the likelihood that its Fed nominee, Carol Parry, will not be confirmed by a Republican Senate this presidential election year. But last week Beltway insiders speculated about whether it might want to see confirmation of another Fed nominee, Roger Ferguson, linked to that of Greenspan÷ thus muddying prospects for the latter. Ferguson already has been confirmed to a four-year term as Fed vice-chairman, ending in 2003. But his current 14-year term as a Board member expires in 12 months. In their college days, Treasury Secretary Lawrence Summers was a roommate of Ferguson and the two remain friends. Summers is said to be interested in getting Senate action on Ferguson?s nomination. So far, Senate Banking Chairman Phil Gramm, R-Texas, has not been willing to act to give Ferguson another term. Asked about the latter?s chances for confirmation this year, a Gramm spokeswoman said the schedule had not been decided yet. A Treasury spokesman did not respond to requests for comment.

To: KM who wrote (37565)	1/16/2000 4:30:00 PM
From: Giordano Bruno	Respond to of 99985

It's a serious example of the 'the ducks are quacking, let's feed them' phenomenon. I can only imagine one remedy for an overfed, noisy duck. Thanks for the article.

To: KM who wrote (37565)	1/16/2000 7:54:00 PM
From: Jack T. Pearson	Respond to of 99985

I think Stebbins has only part of it right. IMHO, everything won't fall at once, and the pullback started last year. Look at ETYS. ETYS was at 84.25 in October. It closed Friday at 20.56. I am sure there are other examples. I think the companies that will be hit the hardest are the high-hype internet stocks with low market share, no earnings, and rapidly slowing growth. Easy come, easy go.

To: KM who wrote (37565)	1/19/2000 11:48:00 AM
From: pater tenebrarum	Read Replies (1) \| Respond to of 99985

Truff, "the ducks are still quacking". well said...they are indeed. the reason is that the Fed has quickly back-pedaled from it's half-hearted attempts to mop up the y2k liquidity as it became obvious in the first week of January that the stock market is particularly ill-prepared for such action. of course, that doesn't invalidate the basic premise of the article, namely that most stock prices have disconnected from reality to a heretofore never seen extent. and that's not sustainable, no matter how much new credit is pouring into the system. as good old Ludwig von Mises, a fellow misanthropic Austrian, has observed: "a credit induced boom continues as long as new credit is poured into the system at EVER INCREASING RATES. it ends when the central bank decides to curtail the creation of fresh credit. if the central bank does NOT curtail fresh credit creation, it ultimately ends with the total collapse of the currency system involved." (not verbatim). there is much talk of Greenspan trying to engineer a soft landing...well, that's not what he's doing. on the contrary, he supplies ample liquidity through the back door via the repos for tri-partite settlement, a.k.a. "coup de whiskey" for the stock market, the name given to said repos by a 1920's Fed governor. so we should all prepare for a hard landing...it seems inevitable. now, if i could only figure out when....<ggg> regards, hb