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To: Sonny Blue who wrote (184039)	7/27/2002 8:33:52 PM
From: Les H	Read Replies (3) \| Respond to of 436258

THE INTERNATIONAL FORECASTER 27 JULY 2002 (#4) (An international financial, economic, political and social commentary.) Published and Edited by: Bob Chapman Vol. 6- No. 7-4 Phone & Fax: 941 639 4756 NEW: E-mail: bif4653@comcast.net US MARKETS There was a secret emergency meeting on Wednesday night to discuss the deteriorating situation of Citibank and JP Morgan Chase and Morgan’s $24 trillion derivative position. Our spies tell us Citigroup and JP Morgan Chase are going to stay separate and have a significant merger of operations. The merger will also involve canceling out mutual obligations. Chase is to get an off-the-books line of credit from the US Treasury. The real problem is the derivatives position. Treasury did not offer the money to unwrap it at current levels. If the price of gold can be kept down the whole contraption can hobble along for a while. Ultimately, we think Chase is toast and Citigroup will not fare much better. They are plotting a big announcement from George W. Bush to seize public attention, but we haven’t yet found out what it is. Probably they don’t yet know. All they want is a means of driving the market collapse out of the headlines. Every thinking person must be worried about what Dubya might do. We surmise that US plans regarding the Middle East will be expanded. White House staffers are talking about Saudi Arabia. Unsurprisingly, the net effect of this meeting is to convey a taxpayer-funded loan to the banks and to move risk for the derivatives position to the US Treasury.