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To: Jim Ilchyshn who wrote (6999)	1/31/1998 11:10:00 AM
From: Jim Ilchyshn	Read Replies (3) \| Respond to of 116762

From WSU... During every boom cycle, the markets generate vast over-enthusism among investors. Markets get grossly overvalued. Then comes the inevitable bear market bust, to clean out the overevaluations. In the past, suppose some rich tycoons or overenthusiastic investors miscalculated -- say in the oil business, real estate or shipping. They were allowed to go broke. Not any more. Now we have the greatest bull market ever. Wall Street has created huge monster institutions. The Street has convinced government these institutions "are too big to allow to fail." Politicians -- who have a vested interest in seeing that the bubble never bursts -- are only too eager to oblige. The first significant private failure government bailed out was Chrysler. That started the great government bailout program in earnest. Next came banks that were allowed to grow so large, they "were too big to collapse." You may remember when the government bailed out Continental Illinois bank. That cost taxpayers billions. Well, what was good for banks was good for savings and loans. Government spent a trillion dollars bailing out that bankrupt industry. Taxpayers are still paying the bill, in the form of special bonds. The technique here is simple. Government takes the loss away from the big players, who make reckless, over-bloated investments. Instead, they spread it to the taxpayers, who are burdened for generations to come. But even that has a limit. The next mess the "couldn't be allowed to fail" was massive third-world debt. Many of America's biggest banks would have gone under. So government bundled the billions banks were losing into the now-infamous Brady Bonds. That saved the banks, and saddled the American taxpayers for the next 20 years with another trillion dollar burden. And the big players went right back into the market. With a lot of help from Goldman Sachs(a leading Wall Street firm) they squandered billions more in Mexico. Treasury Secretary Robert Rubin then ran Goldman Sachs. Once he became Treasury Secretary, he had government bail out the banks and financial institutions for another $50 billion. Goldman Sachs -- Rubin's own firm - - was one of the major beneficiaries of this bailout. These same banks and brokerage firms are now taking huge losses in Asia and Latin america. They never learned their lesson. This time the losses are so big, the money does not exist to bail them out. These government-guaranteed bailouts never work. They reward bad business practices. Bailouts have led to wild specultation in country after country, industry after industry. They have made today's institutions so big and cumbersome, they can't manage their portfolios. They are impossible to analyze, never mind regulate. They hide staggering losses, for incredible lengths of time. Governments will endlessly try to keep bailing out these mega-institutions. They stop only when the no longer have enough money. That's what is happening now. Wipeouts of monumental proportions are occurring on a global scale. The world is about to suffer a financial meltdown, the likes of which have no been seen since the Great Depression. Quick-fix aid packages don't solve the inherent problems. At best, IMF and government aid only buys a little time. They loan mega-institutions enough money to cover a few payments, avoiding an immediate default. But that does not begin to address the bad investments that got them into such grave circumstances in the first place. The problem is, these institutions are broke. They made terrible deals. They destroyed trillions of dollars of assets and dissipated hundreds of billions in cash. By giving them bail out after bail out, the eventual wipeout just gets more costly and devastating. By not allowing the guilty parties to take a loss, bad credit risks soak up the finite capital in existence. Credit-worthy borrowers can no longer get the financing the need. In the capital crisis that follows, both good investors and bad -- wise and unwise -- get wiped out. And the problem is not just in Asia. There are bad deals, huge hidden losses, in Latin America, Europe and even the U.S. American wipeouts will be the most devastating of all. Never are so many about to lose so much. The collapse has already started. Nine years ago, the Japanese markets tanked. They never recovered. Investors were wiped out. But the Japanese government did not allow these institutions to go under. They considered the "too big to fail." Now the domino effect is wiping out good and bad companies throughout Asia. Staggering wipeouts are taking place in economic powerhouses such as Korea and Japan. Company after company, bank after bank, brokerage after brokerage firm is getting wiped out. Now those chickens are coming home to roost. Do not be fooled. The Asian contagion is not a bout of the flue. It's an incurable cancer that is fatal.

To: Jim Ilchyshn who wrote (6999)	1/31/1998 11:15:00 AM
From: Bobby Yellin	Read Replies (1) \| Respond to of 116762

Hi- I think a lot of US citizens might join you..report back if you experience that.. I think you are right about approval ratings..also I don't know about approval rating if US goes to war with Iraq..also don't know how that will affect the projected budget surplus..also don't understand why US is so worried that biological warfare can easily be transported to our shores yet Iran and Kuwait and Saudi Arabia and most of Europe are not? anybody solve that one for me? also after listening to a lot of news, don't know how US thinks they can dethrone S.H. this time..when they couldn't last time and the rest of the world was behind the military action.also people don't usually like the top of the heap(excuse that expression) and if US starts war, how will the rest of the world view us? A lot of my friends think that Clinton and Greenspan have done well for this economy but when I start asking them about how hard they and their friends are working and how many people are underemployed and without benefits,why as reported in the paper a few weeks ago more and more people who are working are seeking free food, how many companies and individuals reporting bankruptcy(anybody have the actual figures or a chart? and with the credit card debt etc besides how devastating our exportation of inflation has to Asia my friends start readjusting their thoughts a bit.. I truly blame this on the media(not the government since they want to keep perceptions upbeat) which focusses on the economy and the stock market, not the price Rubin and company have cost so many workers around the world.. rehashing again, this has been a corporate led recovery..not a consumer led recovery(correct me if I am wrong please) and yes, a lot more people can afford homes since interest rates are so low but when the recession hits, wonder how many people still wish they had stayed in rentals..(maybe I am way offbase on that one so I hope somebody corrects me) (once again if the average US worker starts getting much higher wages and benefits return to consultants(ie Microsoft case) and if we are not going to get a second wave of hacketing(somehow I have never liked the word downsizing..doesn't reflect the true implications) --again with the reports of increased earnings, anybody know how they are calculated..ie do they eliminate the top three percent for instance and the bottom three percent..let us see if they pool all the increases including the wall streeters (what was it a 1000 of them that got over million dollar bonuses) and divide by a number..what kind of great statistics are those?