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To: Mark Oliver who wrote (3414)	5/27/1998 4:03:00 PM
From: LK2	Respond to of 9256

*OFF TOPIC* (But a sign of the times, anyway.) Russia triples interest rates to 150 percent on Wednesday, but according to the International Monetary Fund, >this is not a crisis<. Isn't it wonderful how important people can talk pure bullsh** and get away with it? This reminds me of the Chrysler chairman, Robert Eaton, who recently said the approximately 50 million dollars (very rough estimate) he would make on some of his options was >pocket change< compared to what somebody else would make off the merger of Chrsyler and Daimler-Benz. (Actually, Eaton is supposed to make around 100 million dollars on all his stock options if the merger goes through). PS: Russia's financial problems, along with the problems in South East Asia and Latin America, are supposed to be at least part of the reason for the US stock market volatility. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> dailynews.yahoo.com Wednesday May 27 1:52 PM EDT Russia triples interest rates By Martin Nesirky MOSCOW (Reuters) - Russia tripled interest rates to 150 percent Wednesday in a desperate attempt to give panicking markets a cold shower and control a budget-squeezing economic crisis that threatens the ruble. "That's it," said David McWilliams, a debt strategist at BNP bank in London. "They've drawn the line in the sand and they are going to defend the ruble at any cost." Prime Minister Sergei Kiriyenko underscored that determination, telling a conference Russia was not considering devaluing the battered national currency. Stocks fell across Europe and Russia on ruble concerns and fears a surging dollar could hurt Asia further. Ukraine said it was scrutinizing events while East European currencies fell. The ruble weakened outside the central bank's daily target band but strengthened after the rate hike. Rubles for next-day settlement firmed to 6.19 to the dollar, weaker than Tuesday but stronger than Wednesday's pre-rise level of more than 6.20. Just before the rates announcement, President Boris Yeltsin -- who spent Wednesday at an out-of-town residence -- stepped into the fray by calling an emergency meeting for Thursday with Kiriyenko, the finance minister and the central bank chief. The crisis is a big test for Kiriyenko, in office just over a month, and could undermine political stability and reforms. Yeltsin is already under fire in parliament after forcing it reluctantly to accept Kiriyenko, and the opposition Communists have started moves to try to impeach the president. The central bank said the refinancing rate and Lombard rates for all maturities were being raised from 50 percent, placing them at their highest since February 1996. In a measure of how the crisis has gathered pace, the refinancing rate stood at 30 percent last week. It is seen as a cap to treasury bill yields, which soared 20 points to about 80 percent at one stage, and a weapon to defend the ruble. "We wanted to pour some cold water on the market players," First Deputy Bank Chairman Sergei Aleksashenko told Reuters. "We think that we have responded adequately." The International Monetary Fund sought to keep things cool. "Contrary to what markets and commentators are imagining, this is not a crisis," Managing Director Michel Camdessus told a news conference in Bishkek, capital of Kyrgyzstan. The Kremlin said Yeltsin would meet with Kiriyenko, Finance Minister Mikhail Zadornov and central bank chief Sergei Dubinin on Thursday to discuss world and Russian market ructions. There will be plenty to talk about at the previously unscheduled meeting ahead of a regular Cabinet session. On the Russian markets, the mood was distinctly panicky. The benchmark RTS share index plunged 10.55 percent to close at 187.23, near the lows for the day and at an 18-month nadir. Worry over the domestic economy sparked by troubles in Asia has wiped out the index's gains of the past year. "You've got a situation now where you've got blind panic, especially among Russians," said Martin Diggle, a director of Brunswick brokerage. Just as alarming, Russian short-term government security yields soared to around 80-84 percent in an extra market session. Earlier, the Finance Ministry had placed its 294-day T-bill -- known as a GKO in Russian -- at 61.07 percent. "Investors are extremely concerned," analyst Roland Nash at MFK Renaissance bank in Moscow told Reuters Television. The IMF, a major creditor and possible source of further help as domestic avenues close, said Kiriyenko had spoken to Camdessus overnight. He said Kiriyenko had asked the IMF "to see if this (Russia's finances) justified any particular treatment." It was not clear when or if the IMF would dish out the next tranche, or installment, of a $9.2 billion loan. IMF expert John Odling-Smee is due in Moscow on Thursday for more talks. On Tuesday, Russia and the IMF denied reports Moscow was seeking extra support. Russia suffered a psychological blow Tuesday when it had to announce no one had bid for a 75 percent stake in Rosneft, the last big oil company in government control. Anxious to plug the gap in the budget, the State Property Ministry wasted no time saying the new auction opening date would be set by Monday with a starting price of $1.6 billion to $1.7 billion, compared with the failed reserve price of $2.1 billion. "The government had budgeted to get that money and had planned to spend it," said Stephen O'Sullivan, co-head of research at United Financial Group in Moscow. Finance Minister Zadornov had already announced $10 billion in spending cuts -- some 12 percent of the 1998 budget -- Tuesday. State coffers have also been hit by the cost of a 10-day protest by miners seeking wage arrears. Copyright c 1998 Reuters Limited. All rights reserved. <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

To: Mark Oliver who wrote (3414)	5/27/1998 4:10:00 PM
From: Sam	Respond to of 9256

Mark, "Do we have a time scale for when they go bankrupt?, and will they have trouble paying suppliers?" I don't know. They still have some cash, but I don't know their burn rate. Also, who knows, maybe they'll skip generations, and will go right to GMR, or to 3.4 MR, or some such thing. That is probably their only hope at this point, from what I can see (but, of course, I'm not privy to their R&D, so this could all be hot air, but their results so far don't inspire confidence). "When does the short position come to the rescue?" If they go bankrupt, never. Cause no one will have to cover. "Is there anything positive about APM going forward? Is there anything worth buying for a competitor?" Doubtful. The Japanese companies let them have TFI, they aimed right at MR (I am thinking of Yamaha and TDK here) for HDs. Why would they need APM? The only positive possibility that I can think of--and it is only highly speculative on my part, cause I really don't know--is that they have some R&D going that will allow them to produce next generation heads to qualify in the fall, since they have apparently lost on all of the production programs right now, they weren't even in the game. They have been in this position before, so who knows, maybe they can play phoenix again. I'm not long or short. Wouldn't touch it. I have too many other problem stocks:-(. Best, Sam