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To: Gabriela Neri who wrote (19023)	9/16/1998 5:51:00 AM
From: Alex	Respond to of 116764

Capitalism falling apart, says Soros By Alex Brummer, Financial Editor Wednesday September 16, 1998 The financier George Soros warned last night that the global capitalist system is in danger of imploding following the panic flight of capital from the emerging markets of Latin America, in the wake of the Russian crisis. In testimony to the US Congress, Mr Soros said: "The global capitalist system that has been responsible for our remarkable prosperity is coming apart at the seams." He said there was "general panic" in Latin American markets and that a financial collapse in Brazil could spread to Argentina. His remarks came amid reports that the Latin American countries are negotiating with international lenders to put together a $100 billion emergency loan fund for the region. The latest Soros intervention, coming in the aftermath of this week's efforts by President Clinton and the Group of Seven industrial countries to restore confidence in the global economic system, appears certain to shake financial markets. When Mr Soros called for a rouble devaluation in August he sparked a financial and political crisis in Russia which resulted in a collapse in the rouble, costing Mr Soros's investment funds an estimated $2 billion. In his testimony, Mr Soros lends his weight to the Clinton adminstration's demand that Congress immediately authorise its $18 billion contribution to a capital increase for the International Monetary Fund, which is rapidly running out of cash. He also revises his own idea of an international insurance fund to protect countries against speculators such as himself. Mr Soros, the chairman of Soros Fund Management which invests on behalf of rich savers, said the default of Russian banks on their obligations and the subsequent shutdown of Malaysia's financial markets to foreigners has led to a "global credit crunch in the making". "The flight of capital has how spread to Brazil and put the rest of Latin America at risk," he argued. His comments follow the decision of the Brazilian authorities to raise interest rates as high as 50 per cent to protect the country's currency - the real. Similar moves were attempted in Moscow before it succumbed to pressure to devalue with disastrous consequences. Mr Soros cautioned US policymakers against complacency just because most of the trouble is occurring outside the US. He said the global capitalist system involved not only free trade but, even more importantly, the free movement of capital in a "gigantic circulatory system" in which capital was sucked up by financial markets and institutions at the centre and pumped out to the periphery. The Asian crisis reversed the direction of that flow, Mr Soros said. Capital began to flee the periphery, at first to the benefit of the financial markets at the centre. The US economy then enjoyed the best of all possible worlds as cheap imports helped to keep inflation in check and stock prices moved to new highs. But Soros said the crisis had reached the point where distress at the periphery was not good for the centre. "The pain at the periphery has become so intense that individual countries have begun to opt out of the capitalist system, or simply fall by the wayside," he said. He said the programmes of the international monetary authorities had not worked and those authorities had been unable to reassure the financial markets. Print version

To: Gabriela Neri who wrote (19023)	9/16/1998 7:08:00 AM
From: Bobby Yellin	Respond to of 116764

Hi check this one out bloomberg.com pay attention to Blair going to the top corporate lobbyist.. a fantastic new friend of mine made me start looking in other places for what is going on behind the stalemate in Japan.. although my nephew explained that Japan still a "samari offshoot" type of business culture, I never though the political parties might also have that type of relationship..my friend said look to that.. also..don't think Japan is looking for its consumer to start spending.. if that is what they wanted they never would have raised consumer taxes..I keep on reading how so many social nets are now being removed from South America..it would be a joke if communism takes over in the 21th century..citizens are witnessing what capitalism(actually don't want to call it capitalism since I thought capitalism implies investing long term for growth rather than just making traders fantastically wealthy or fantastically poor) and greed are doing to the quality of their lives correct me if I am wrong.. the dollar/yen re gold a yen strengthening and not because of margin calls would signal the bottom and the engine restored to pullout SEA which would bring back commodities and gold and customers to big corporations here It would seem that this global economy has definitely benefited but right now just the west..with its exporting inflation..from what I have read most citizens of the world have suffered.. Now with talk of rate cuts..again how many fixed income people are going to be hurt further What is your bet that the fed is going to lower rates? I bet no although it is already factored into the market and probably has put greenspan up against the shooting wall..the proposed IMF and world bank bailout might be his way out...so the games can continue Re Soros..too bad he can't just propose food to Russia etc.. plus he has backing for postponement of rate cuts bloomberg.com If no rate cuts what happens with the Dow? Clinton probably doesn't want a further dow meltdown..the times are just fascinating So far the financial heads just have shown their ability to kill the little guy and make corporate heads and financial types tons of money (another friend implied that freedom just exists in ones mind) bobby ps TURkey doesn't seem to care about IMF's lack of humanity go Turkey bloomberg.com

To: Gabriela Neri who wrote (19023)	9/16/1998 7:34:00 AM
From: Bobby Yellin	Respond to of 116764

o/t keidanren.or.jp "Japan Federation of Economic Organizations (abbreviated in Japanese as "Keidanren") was established on August 16, 1946 as a nationwide business association. Its membership includes 1,011 of Japan's leading corporations (including 52 foreign firms), as well as 121 industry-wide groups representing such major sectors as manufacturing, trade, distribution, finance, and energy." here's T.I keidanren.or.jp

To: Gabriela Neri who wrote (19023)	9/16/1998 8:30:00 AM
From: Bobby Yellin	Respond to of 116764

definitely no signs of bottom yet nytimes.com ps.. waiting to read that the reserves in China are not what they are said to be.. seems as if they are beginning to crack down