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.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: scotty who wrote (18842)	9/14/1998 4:35:00 PM
From: goldsnow	Read Replies (2) \| Respond to of 116759

Scotty, not so fast...It looks like Monica may knock Brazil off the Cliff.. The way I see it Clinton gaining upper hand may turn to be a trap..(I can't believe SI Bob does not want to talk about it) Suppose Congress does not move a finger to help Clinton/IMF/Brazil.... I want to see a poll at Dow 6800.... EMERGING MARKETS-Brazil debt load worries investors 01:13 p.m Sep 14, 1998 Eastern By Diane Craft LONDON, Sept 14 (Reuters) - Brazil's financial markets face a key test in coming weeks when local investors holding a massive amount of short-term debt must decide whether to roll over their holdings, analysts said on Monday. Over the next six weeks, Brazil has approximately 84 billion reais ($71 billion dollars) of maturing short-term debt, including central bank and Treasury instruments, a burden that is unnerving foreign investors. The figure does not include additional interest payments on roughly $$37.9 billion of external debt in October. ''As things stand at the moment, the concern is obviously about this very heavy burden of domestic debt that is maturing,'' said Neil Dougall, Latin American economist at Dresdner Kleinwort Benson in London. ''They need to be in a position to continue to roll that over,'' he said. ''This is key. They have to maintain the confidence of the holders of this debt who are largely domestic players.'' Both local share prices and Brazilian dollar debt prices have tumbled in recent weeks amid growing concerns about the country's ability to fund short-term liabilities. While an official interest rate hike to 49-3/4 percent last week was seen as a stop-gap measure to stem capital flight, analysts said punitively high rates further highlighted the country's need to cut its large fiscal deficits. According to analysts, Brazil has been haemorrhaging reserves at a rate of more than $1.0 billion a day for the past two weeks. But analysts said the advent of the country's presidential elections on October 4 would make it difficult for Brazil to implement tough fiscal measures. In addition, they said the government's credibility on implementing fiscal measures was also called into question. ''All we have had so far are some vague statements about cutting social and infrastructure spending this year as part of their attempt to cover the additional interest costs,'' said Dougall. ''We also need to have the confidence that there won't be the type of slippage that we had after the package at the end of last year where they failed to follow through on it,'' he added. Others agreed, saying the Brazilian government must bite the bullet and take necessary steps to tackle its fiscal deficit. ''If they are unable to roll over their debt over the next few months then the situation is going to deteriorate,'' said Chris Portman, senior analyst at ANZ Investment Bank. ''They need to do something to stem the loss of confidence and that will involve bringing forward various economic policy measures that the government was planning for after the elections,'' he said. ''It needs to be a credible package and convincing and very large and it needs to be combined with a gesture or promise of support at least from the IMF, if not from the U.S,'' he added. The International Monetary Fund said on Friday it was ready to rush cash to Brazil even though the country had not yet requested any funds. Analysts said the U.S. government surely would push for assistance to Brazil because of its own interests. ''Brazil is sufficiently important that if they do require external financing of the IMF sort the G-7 and especially the U.S. in this case will be eager to see them get it,'' said David Boren, debt strategist at Daiwa Securities. They said the U.S. would not want Brazil to go the way of Russia and restructure its debt because of the damage it would cause to U.S. banks, which are heavily exposed to Latin America in general, and to the country's economy. According to analysts, a fifth of U.S. exports go to Latin America and U.S. banks have roughly $76 billion of cross border loans to Latin America. ''If Brazil went over the cliff, there is no doubt about the fact that there would be very serious knock-on effects to other countries in the region,'' said Dougall. U.S. President Bill Clinton on Monday said he would urge the IMF to use emergency funds to contain the world crisis. While analysts do not expect Brazil to default on its short-term or external debt obligations, they said a sustained depletion of foreign exchange reserves could present a problem further out. ''I don't see them doing a Russia and reneging on their domestic debt obligations and I don't see them doing the same things on their external debt either,'' said Boren. ''But the consequence is that reserves could become seriously depleted and without additional external assistance Brazil would face a precarious external financing situation for months to come if they aren't able to get assistance in the short-term,'' he added. ((London Newsroom +44 171 542 5110, fax 583 7239, uk.emeringmarkets.news+reuters.com)) Copyright 1998 Reuters Limited.

To: scotty who wrote (18842)	9/14/1998 4:54:00 PM
From: Alex	Respond to of 116759

US LEADS G-7 IN DISPLAY OF RESOLVE -- BUT NOT A RATE CUT YET By Denny Gulino ÿÿÿÿÿWASHINGTON (MktNews) - In the culmination of what appears to have been a concerted White House effort in the past three weeks to organize an international response to market turmoil, the Group of Seven finance ministers and central bank governors Monday issued a statement that said the balance of risks internationally has shifted and that now is the time to spur international growth. ÿÿÿÿÿThe G-7 statement was distributed by the Treasury Department, shortly after Secretary Robert Rubin ended a New York news conference to underline President Clinton's noon-time announcement that the U.S. is determined to accelerate world-wide response to crises in Asia, Russia and gathering turbulence in Latin America. ÿÿÿÿÿThe unusual G-7 statement was being issued, it said, "in light of the exceptional pressures in financial markets and deteriorating prospects for growth in many parts of the world." ÿÿÿÿÿThe statement was rare echo of the latest U.S. central bank stance, Federal Reserve Chairman Alan Greenspan's own pronouncement that the risks faced by the U.S. had become balanced by the time of the Aug. 18 meeting of the Federal Open Market Committee, taken to mean the FOMC was no longer maintaining an intermeeting bias to tighten rates. ÿÿÿÿÿ"They agreed that inflation is low or falling in many parts of the world," the G-7 statement said of the finance ministers and governors. "They welcomed some encouraging developments as regards domestic demand growth in continental Europe. Nevertheless," the statement went on, "in view of the slowdown in demand in a number of economies, especially among emerging market economies, the balance of risks in the world economy had shifted." ÿÿÿÿÿThe G-7 countries "emphasized their commitment to preserve or create conditions for sustainable domestic growth and financial stability in their own economies. In this context, they noted the importance of close cooperation among them at this juncture." ÿÿÿÿÿThroughout the Clinton speech to the Foreign Affairs Council of New York, and the subsequent news conference of Rubin and White House National Economic Council chief Gene Sperling there has been no mention of any interest rate cut coordinated among the G-7 countries. However International Monetary Fund Managing Director Michel Camdessus, in an interview with a French newspaper Monday, said that "a rate cut could be part of the planned package" at the upcoming G-7 meeting in Washington Oct. 3. ÿÿÿÿÿClinton said the U.S. and the other G-7 countries are expanding efforts to help viable countries in Asia to emerge from their crises and were asking the World Bank to double its safety net loans and grants and taking a number of steps to help in the short term. ÿÿÿÿÿTo keep focused on long-term modernization of the international financial system, Clinton said he is asking Rubin and Greenspan to convene a meeting of their counterparts in Washington. The meeting would apparently take place at the same time the finance ministers and central bank governors are already assembled for the joint meeting of the International Monetary Fund and the World Bank. A Group of Seven meeting is already scheduled to occur in the midst of the semiannual joint meeting. -more- Market News International Washington Bureau: (202) 371-2121