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To: Enigma who wrote (17701)	9/5/1998 8:31:00 PM
From: goldsnow	Respond to of 116779

I meant as scapegoat for all world troubles including Clinton/Rubin blunders (IMF and Russia and so on World gloom bodes ill for birth of euro By Toby Helm, EU Correspondent, in Salzburg, Austria EUROPEAN leaders redoubled their efforts to prevent a crisis of confidence in the single currency yesterday by insisting that "euroland" was already shielding its 11 member countries against the deepening turmoil in world markets. With less than four months to go before the biggest and most risky experiment in the European Union's history is launched senior government figures were trying to calm nerves by praising the unborn currency's early record. At a meeting of EU foreign ministers in Salzburg, Austria, which holds the presidency, Wolfgang Schssel took the lead by highlighting how some non-euro currencies were suffering on the markets, while those that will be in euroland had stood rock solid. Europe had created a "very important answer" to counter economic shocks, a massive currency block which, he claimed, was protecting individual, weaker economies and leaving those outside more vulnerable. He said: "Don't forget we have member states of the EU not integrated in Emu and in some cases the markets are attacking those currencies . . . This shows we need more co-ordination, more Europe not less Europe. He was referring to Denmark, which has already had to act in foreign exchange markets to protect its peg to the D-mark and Sweden, neither of which will be Emu founder members. Mr Schssel's message that "Emu is already working" echoed that of Jacques Santer, European Commission president, who said on the eve of the meeting how glad he was that all key decisions on the euro had been taken in May, well before the Russia crisis broke. But the carefully orchestrated propaganda coming out of Salzburg disguised a less cheerful reality - that the euro will arrive in what many economists believe are the most worrying global economic conditions for decades. On one thing alone, all serious politicians, financiers and economists are united. Barring some massive, additional economic trauma, the euro will go ahead on January 1 with 11 countries taking part. Far too much political capital has been invested to contemplate delay, which would anyway smack of panic and unleash a loss of confidence in Europe that could make the effects of Russia's crisis look like small beer. But, at the same time, even Mr Schssel knows that the turmoil in Moscow, the Far East and the worries on Wall Street cause massive complications for the the new currency's launch. One worry is that because many EU countries - including the big guns, Germany, France and Italy - passed their economic tests for qualification only by the narrowest of margins (and with the help of book-keeping tricks), a slowdown in growth levels from three per cent this year could put them in breach of their Maastricht Treaty limits this year or next. The prospect of economic slowdown has also presented the new European Central Bank, which will run monetary policy in the euro zone, with a delicate dilemma over interest rates. If it gets its decision wrong the results could be ruinous. The key question is whether, following the Russia crisis, short-term rates should be set lower than the 3.5 per cent envisaged by most experts before the crisis broke, in order to keep the European economy on a growth path. While America might well have to pull down its rates in order to stimulate growth, the fear is that Wim Duisenberg, new president of the European Central Bank, and his board members will hold them too high for too long. Some fear that that would be an error that could even trigger deflation. The stakes could hardly be higher for the reputation of the euro, as its momentous birth approaches.

To: Enigma who wrote (17701)	9/5/1998 8:34:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116779

Wall Street bubble starts to burst By James Langton in New York BELTS are tightening on Wall Street as the American stock market shifts downwards. In the words of one trader on Friday, as the Dow hiccuped another dozen points south:"Until Russia went ape, this had been the best time any of us could remember. But a memory is what it may now be." Sales of Versace ashtrays for $400 (œ245) are said to be stagnant. The price of a case of 1982 Chateau Latour has been slashed by half to just $5,500. In Greenwich, Connecticut, things got so bad last week that, as one local put it: "People are jumping out of their windows - into their swimming pools." A more tangible example of economising among the super-rich emerged with the announcement that one of the leading Democratic candidates for the Governorship of New York was a little short of money. Betsy McCaughey Ross, a former Republican confessed that her wealthy investment banker husband, Wilbur, had reneged on an earlier promise to underwrite her election campaign. Mrs Ross, who revealed that she was now "$2 million lighter" has had to chop expensive television advertising days before polling. Her husband, a senior managing director at Rothschild New York, refused to comment. Mr Ross is understood to have pulled the plug after suffering financial difficulties as a result of stock market losses. Much of the immediate pain of Monday's 500 point slump was diluted by the mid-week mini-recovery. The New York Times reported from Greenwich where wealthy members of an investment club held a crisis meeting to discuss their portfolios. Some of the heaviest hits were taken by company chief executives whose share options plummeted by millions in a couple of hours' trading. A survey by Wall Street analysts found that Jill Barad, the head of Mattel, woke up on Tuesday more than $24 million poorer. Ten of the top 138 company bosses lost more than $120 million between them, while Bill Gates, the richest man in the world, saw the value of his Microsoft holdings plummet $5.6 billion. Sales of designer clothing along Fifth Avenue were said to be slower and the crowds swilling Champagne at Manhattan's exclusive restaurants a little thinner. But the cause was the long Labor Day weekend, with the wealthy flocking to seaside homes for a last taste of summer. Analysts agree that the volatility of the stock market means that it is not yet possible to measure the impact on the sales of Rolex watches and Mercedes sports vehicles. But some are being hit harder than others. "The superbly wealthy are not affected," noted one Hamptons fine wine merchant who dropped his prices substantially in recent months. "But some of our plain wealthy clients are. We've made a lot of money over these past years. Now we have to give a little back." Such vast sums have been piled up by many investors that even losing a couple of million has only a marginal effect. The latest edition of Fortune magazine describes recent conditions on Wall Street as a "Pig Market" where many make more money than they can spend. The magazine quotes Christopher Block, owner of a brokerage firm who bought twin Porsches for himself and his wife but decided that they could not both have the same car and traded up to a Ferrari. "What do I like that I don't have?" the 31-year-old trader said. "I don't know. If I think of it, I'll buy it." A longer-term decline in the stock market could spell an end to some of the worst excesses of consumption. Many brokers depend heavily on their performance-related bonuses which can be up to 20 times their salary. But for the moment, many investors and traders are taking their minds off the current stock market woes in the way they know best. One luxury car dealer reported a call from a client first thing on Tuesday morning seeking what he called: "Instant gratification in the Porsche area."