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To: Jan Crawley who wrote (15445)	8/31/1998 6:42:00 PM
From: Rob S.	Read Replies (1) \| Respond to of 164684

What will it take to stop the market slide? Hmmm . . . it's gotten pretty ugly - the kind of market that takes down the good with the bad as investors run for cover and too few dare come in to catch a falling knife. Thinking back to previous crashes in '97, 90, & last OCT, things had to get to the point of being real bad before some catalyst came in to restore the market confidence to the point that the bargain hunters mustered the nerve to step in. But when will that happen this time? In '87 and less severe crashes since, the White House administration (President) mustered the heads of several departments, the NASDAQ, American and NYSE stock exchanges, foreign exchange and finance ministers, and, as importantly, a consortium of the heads and CFOs of major corporations who pledged to support international currencies and stock markets and to buy-back lots of stock. That put enough force behind political statements to trigger a return of confidence and capital to the markets. Something like that has to happen at a point where it can be effective - a point of catharsis or inflection in both technical aspects and psychology of the market. My thinking is that the Clinton administration has been a bit demoralized and in disarray because of the Lewinski thing being blown up WAY, WAY out of proportion. Let's face it, the root cause of the Clinton "scandal" being pursued is more to do with political "pay-back" and right wing radicalism as it does with any real concern that the public trust and interest has been abused. Now the great economy and budget surpluses which republicans engineered are in jeopardy of coming apart. The budget surplus is largely due to the taxes generated from robust capital markets and increased trade and profits. But markets are always only as good as the confidence of those who participate in them and the Republicans have damaged the Presidency (or, at least didn't protect the mortal shroud). Now we have a weakened Presidency and very thin skin on the economic bubble that protects the prosperity that both Republicans and Democrats and all of us depend upon. Who is to blame if the economy heads into recession? "Republican supply-side voodo-economics?" (I agree with fiscally sound supply-side theory). The Dems will make hay in the fall on this issue if the market is devastated another 20-30%. Will the Clinton administration be quick to rally a consensus of US and world leaders to bolster the investment climate? Or will the administration sit back, partly due to loss of stature of the office of the President and partly due to "let's let the republicans stew in their own juices until after the elections or at least until we can look like heroes". In any case, there is reason to believe that this won't be gotten over quickly.