Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Invest / LTD -- Ignore unavailable to you. Want to Upgrade?

To: Snowshoe who wrote (1875)	8/18/1998 8:58:00 AM
From: Lucretius	Read Replies (1) \| Respond to of 14427

Monday August 17, 11:50 pm Eastern Time Clinton admission may rattle dollar, analysts say By Isabelle Clary NEW YORK, Aug 17 (Reuters) - U.S. financial assets will probably shrug off President Bill Clinton's admission of inappropriate conduct as much ado about nothing and keep their safe-haven role in a troubled world economy, analysts said on Monday. The lofty dollar, they added, may be vulnerable to an expected barrage of anti-Clinton criticism, but even that pressure should be temporary and have a limited bearing on pricey U.S. Treasuries and equities. ''We'll probably see the dollar reacting very aggressively short-term to bad headlines from Washington and then focus on the next event,'' said managing director Chris Turner at the advisory firm I.D.E.A. ''The risk now is that when the bad news comes out, the dollar may fall. But the majority of the impact will be viewed as a short-term phenomenon because probably enough bad news about Clinton has been priced in,'' he said. Turner said he anticipated the dollar would undergo nervous gyrations if Clinton remained under attack despite his televised apology on Monday night that he had misled the nation about a relationship with former White House intern Monica Lewinsky ''that was not appropriate.'' According to his lawyers, Clinton made a similar admission earlier on Monday in 5-1/2 hours of closed-circuit testimony before a Washington grand jury investigating possible perjury or obstruction of justice. Following Clinton's 10 p.m. EDT (0200 GMT) address to the nation, the dollar was quoted in Asia trade at 1.7948/53 marks and 145.70/75 yen, vs. 1.7945/55 marks and 145.84/94 in late afternoon trade on Monday. Analysts pointed out that Clinton's problems, while serious enough to raise the issue of impeachment, paled in comparison with the economic crisis faced by former superpower Russia or the banking crisis crippling the world's second-largest economy, Japan. Russia moved toward devaluing the rouble on Monday. Japan has yet to take measures to absorb an estimated $1 trillion worth of bad bank loans. The analysts also said the U.S. political system was strong enough to weather a political storm engulfing the president. ''This could make some foreign exchange markets nervous, but I don't know where people would put their money but here. All of this still leaves the United States as the best place to leave your money these days relative to other countries,'' Carole Stone, deputy chief economist at Nomura Securities International, said in a reference to the Asian and Russian crises. Stone noted that foreign buying had helped the U.S. benchmark 30-year Treasury bond yield set a record low of 5.503 percent on Monday amid concern about the situations in Asia and Russia. '''Morass' is the word that comes to mind when talking about other countries in crisis. I would be much more concerned that the rest of the world is in a much more precarious situation at the moment,'' Stone added. Pierre Ellis, senior economist at Primark Decision Economics, said the U.S. political system could handle any crisis, even one triggered a possible Clinton resignation. ''The stock market is very fundamentally sound. There is considerable uncertainty about earnings, but it's a matter of late recognition, not a case of rapid crisis,'' said Ellis, who noted that the Dow Jones industrial average rose 149.85 points, or 1.78 percent, to 8574.85 points on Monday although Clinton's admission had been much anticipated. ''If the worst happens and Clinton resigns, we know Vice President Al Gore will become president, and he's a solid man,'' Ellis added. ''Even Clinton's resignation would be unlikely to create a great cloud of gloom that would hurt consumer spending. Life will probably keep on going.'' Clinton has retained good performance ratings in public opinion polls since the first charges seven months ago that he had had a sexual relationship with Lewinsky. Pollsters largely credited the good ratings on the stellar performance of the U.S. economy under the Clinton administration. ''We have benefited from the policy of the Federal Reserve. The economy is slowing down to a sustainable rate. The rest of the world has worked to our benefit because we are the safe haven for international capital. It's helpful to our markets ... regardless of what happens to Clinton,'' Ellis said. The Federal Open Market Committee (FOMC) meets on Tuesday amid unanimous expectations it will keep the federal funds rate unchanged at 5.50 percent because of concern over economic and financial problems in Japan and in a number of emerging-market economies.