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To: Crimson Ghost who wrote (16983)	8/30/1998 1:47:00 PM
From: Gabriela Neri	Read Replies (1) \| Respond to of 116790

Yeah. But that would be way too proactive and politically unacceptable. Greenspan has no balls to do something that overt. He likes to inflict pain surrepeticiously, so that blame is difficult to assign. A lowering of rates, perhaps and perhaps soon. A raising of margin, I doubt it.

To: Crimson Ghost who wrote (16983)	8/30/1998 3:16:00 PM
From: goldsnow	Respond to of 116790

Bay Street Beat: Investors brace for aftershocks 12:12 p.m. Aug 30, 1998 Eastern By Sarah Edmonds TORONTO (Reuters) - Investors shaken to the core by the Canadian market earthquake last week are braced for fearsome aftershocks in the days to come. And market analysts can lend little reassurance that the worst is over. ''It's been a long week, it really has,'' said John Kellett, vice-president of equities at Royal Bank of Canada. In the dust thrown up by last week's 528.06-point, or 8.4 percent, tumble to levels unseen since April of last year, many market experts are hesitant to predict what the next bend in the road will bring. Global market turmoil has some international observers concerned about dire possibilities, including a worldwide recession. Canada's domestic problems are also coming increasingly to the forefront and many analysts blame them for exacerbating difficulties imported from Asia and Russia. There are increasing calls for the U.S. Federal Reserve to ease interest rates, which would pressure the strong U.S. dollar and halt the fall in commodities. ''In my opinion, we will see pressure growing on the Federal Reserve to ease monetary policy,'' said Robert Spector, a financial economist at Nesbitt Burns Inc. ''It would certainly ease some of the pressure building globally.'' However, senior Fed officials, gathered in Jackson Hole, Wyoming, for a few days of academic debate about income inequality, did not offer the prospect of an imminent cut in rates. But a tightening of rates appeared, by all indications at the meeting, to be off the Fed's immediate agenda as well. The bellwether Toronto Stock Exchange TSE 300 Composite Index is now 26 percent below its April 22 peak after a severe downdraft this week caused by global market turmoil, sagging commodity prices and a 100-basis-point interest rate hike by the Bank of Canada in a desperate effort to stabilize the Canadian dollar. The 372.84-point sell-off on Thursday was the third-biggest one-day point drop ever for the TSE 300 and, at some six percent, its fifth-largest percentage plunge. On Thursday, many believed the rate hike was a futile effort. But the currency was trading at C$1.5620 (US$0.6402) Sunday, stable from Friday's close and the rate hike was cited as part of the reason for the recovery. The currency sank to C$1.5845 (US$0.6311) on Thursday despite the rate move, the lowest level in its 140-year history. ''The Canadian situation, at least over the near-term, seems to have stabilized. The wild card will be if commodity prices, which have been behind some of the decline of the Canadian dollar. If those go into a renewed tailspin, then we have to worry a bit,'' Spector said. Some steadfast optimists persist in calling the TSE's current level a bottom although many believe a sea change in the fiscal policy of Japan and Canada -- sharp tax reductions for the beleaguered consumer -- is the only move likely to spark a convincing recovery. ''I don't feel that we've really found a bottom anywhere yet because I think the market's still trying to assess the overall impact of...really Japan,'' said Joe Canavan, president and chief executive of Synergy Mutual Funds in Toronto. Japan's devalued yen has given it a trading advantage over other countries in Asia and abroad and is starting to tell on Latin America. With the fall in demand for commodities by manufacturers hurt in the trade decline, Russia and other commodity-based economies like Canada have been laid low. Russia is in the midst of a financial crisis, in part because of this, and is impacting commodity prices even further because many fear it will oversupply already creaking markets with base metals. Gold hit 19-year lows last week, further damaging Canadian markets which are heavily laden with gold mining stocks. Added to this lethal international cocktail are some made-in-Canada problems -- a monumental government debt load, a massive social infrastructure and the always uncertain future of the country's relations with the French-speaking province of Quebec. ''I think what's going to have to happen is we are going to have to have a shift in Japanese thinking similar to what I'm suggesting for Canada which would be a significant reduction of personal income taxes there,'' Canavan said. ''If Japan turns it around, then we will have hit a bottom and we will see a possibly sharper increase. So there is a potential for this market to explode on the upside if we bring things back in order. And if we saw those (tax cut) moves from the federal government, that would certainly be a very, very strong sign to the international community and to the Canadian investing community.'' ($1-$1.56 Canadian) Copyright 1998 Reuters Limited.