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To: Bobby Yellin who wrote (16172)	8/19/1998 5:20:00 PM
From: Alex	Read Replies (1) \| Respond to of 116871

ANALYSTS: DEVALUATION MAY BRING DOWN YELTSIN, 75% OF BANKS By Lara Burdess ÿÿÿÿÿNEW YORK (MktNews) - Analysts said the de facto ruble devaluation which has already caused a collapse in wholesale and retail dollar-trade in Russia, as well as a further impoverishment of the population, may lead to wide changes in Russia's political and financial landscape. ÿÿÿÿÿ"The interbank market in Russia is completely dead," said a senior London-based financial analyst at a major U.S. investment bank. ÿÿÿÿÿ"The day-to-day operations of Russian banks have also been reduced to a minimum, there has been no currency retail," she said, referring to an absence of ruble-dollar exchange. ÿÿÿÿÿThough currency booths are posting nominative ruble-dollar rates there has been no actual trading, since banks are not selling dollars, sources said in Moscow. ÿÿÿÿÿ"There were no lines of people to buy because no one would sell," she said. As a further sign of the depth of the crisis, she said ATM machines have been closed since Monday. ÿÿÿÿÿThe official central bank exchange rate is 6.99 rubles to the dollar, but in practice black market prices have already overshot the 9.00 upper limit of the official band. Analysts expect the ruble to fall further, with far-reaching consequences. ÿÿÿÿÿIn shock from the financial upheaval, Russians in general have yet to speak out. "It is very quiet here," one source said. "They don't understand yet what has happened." ÿÿÿÿÿWith inflation poised to erupt, hitting the population hard, analysts see drastic changes ahead for the Russian political landscape. ÿÿÿÿÿMost analysts said President Yeltsin's promise last Friday that there would be no devaluation might now cost him his job. Unwarned and unprepared, the Russian masses, who saw their savings cut by a third on Monday, will not easily forgive Yeltsin for their further impoverishment. ÿÿÿÿÿBefore Monday, ruble strength and low inflation shielded Yeltsin's administration from attack. ÿÿÿÿÿ"A major political opponent of Yeltsin (Communist leader Gennady Zyuganov) said the President has devaluated not just the currency but himself as well," said Max Risman, portfolio manager at Orloff's International Investment Group in New York. ÿÿÿÿÿ"The scariest thing today is the absence of any comments from Yeltsin's advisers. It looks very much like the calm before the storm," Risman said. The Kremlin said Wednesday that Yeltsin has no plans to address the public about the crisis and will extend his ongoing vacation. ÿÿÿÿÿSources in Moscow said a coalition government with representatives from all parties might be formed, and there is a common hope that "Washington may finally turn its attention away from Monica Lewinsky" toward political developments in Russia. ÿÿÿÿÿThe ruble devaluation may also induce some major changes in Russian banking, analysts said. "Today the administrative side of Russian banks were very active. They were discussing with each other how to survive the situation," a Moscow source said. ÿÿÿÿÿTwelve leading Russian banks announced Wednesday their intention to form a group, providing help to each other with interbank payments. Earlier Standard & Poor's said the ratings of six Russian banks are not meaningful, indicating they are virtually in default. ÿÿÿÿÿ"The truth is that about 75% of Russian banks will go out of business. And the painful truth is that these banks should be burned in flames, as they offered no real contribution to the economy but were instead merely hedge-fund and money-laundry centers. They were using the IMF money to make profits and were playing on the GKO (Russian Treasuries) market," said a London-based analyst from a U.S. brokerage. ÿÿÿÿÿBefore committing to the desperation of ruble devaluation, the central bank spent around $3.5 billion to support the currency against speculative attacks from mostly domestic players, sources said. Ultimately, the bank collapse will help to clean up the financial community. ÿÿÿÿÿAnalysts said one of the many unexpected side-effects of the ruble devaluation may be easier tax collection, as exporters find that their real taxes are now three times less. The possible reaction of the IMF to these developments is a source of speculation. 16:25 EDT 08/19 c 1998 Market News Service, Inc. economeister.com

To: Bobby Yellin who wrote (16172)	8/19/1998 8:34:00 PM
From: Ray Hughes	Read Replies (1) \| Respond to of 116871

'Lo Bobby, Funny, ain't it, that the World's debt bubble is bursting with dire consequences for the masses in Asia and, due to ripple effect, possibly many in Africa & So. America, yet POG declines. Could it be that, as A. Greenspan said back in the early '80s would have to be done to restore dollar confidence, that the Feds are selling gold from U.S. Treasury, to keep gold's volatility to near zero to convince the market that there's no trading profit potential in gold? Listening to the guys who make policy and have the clout to make that policy stick is the best way to understand, and profit by, markets. Greenspan said in print that gold's trading range must be reduced to zero. In print he said he spelled out that U.S. Treasury gold holdings would be bought, or sold, according to need. Its absurd to think one can beat the guy who makes the rules and, to boot, has $billions to enforce his rules! RH