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To: Ron Wilkinson who wrote (19181)	9/17/1998 2:36:00 PM
From: butkus	Respond to of 116763

The Clinton campaign mantra was "It's the economy stupid" implying that the only thing that matters to the Am public is the economy. Clinton still has a 61% approval rating, many say, because of the economy. "For by your words you will be acquitted, and by your words you will be condemned." Observe the economic unfolding and think about their words "it's the economy stupid" as we become condemned by them.

To: Ron Wilkinson who wrote (19181)	9/17/1998 3:29:00 PM
From: Alex	Read Replies (1) \| Respond to of 116763

UN AGENCY WARNS GLOBAL ECONOMY COULD ENTER GLOBAL RECESSION ÿÿÿÿÿGENEVA (Mktnews) - The world economy runs a serious risk of seeing a full-blown recession, unless the major industrial countries take swift action to reverse the situation in Asia and stimulate world demand in goods and services, a U.N. agency said. ÿÿÿÿÿThe agency said the Asian crisis was to cost the world economy $260 billion in lost output in 1998, or above 1% of the world total. It also forecast the world economy was to grow this year by only 2% sharply down compared to 3.2% in 1997. ÿÿÿÿÿThe U.N. Conference on Trade and Development (UNCTAD) forecast the U.S. economy will expand 2.3%, down on the 1997 performance of 3.8%, Japan to post a drop of 1.3% and the European Union to post an increase of 2.6%. ÿÿÿÿÿRubens Ricupero, UNCTAD Secretary-General, warned of more bouts of financial instability in emerging markets, a large correction of equity prices in major industrial economies, a slowdown in the United States, and a prolonged recession in east Asia and Japan. Ricupero, a former Brazilian Finance minister, said increased trade imbalances among major industrial countries could renew trade conflicts. ÿÿÿÿÿIf such a damaging outcome is to be averted, noted Ricupero, surplus countries such as Europe, and Japan must increase their contribution to the world economy, and deflationary policies in East Asia must be reversed. ÿÿÿÿÿThe UNCTAD chief said that the U.S., along with Japan and Europe, "(they) alone have the power to quickly change the impending threat". UNCTAD economists believe that only a policy change from deflation to reflation can bring lasting results, and "lower interest rates, expanding liquidity and higher public expenditure can help reverse economic and social collapse." ÿÿÿÿÿIn the crisis plagued Asian region, UNCTAD said it expects Gross Domestic Product (GDP) in the Indonesia to decline, by 12%, Thailand by -8%, in Korea by -6%, and in Malaysia by -2.5%. Moreover, it also expects the powerhouse Chinese economy to expand by 6%, down from last year's 8.8%, and neighboring Hong Kong to dip by -2%. UNCTAD's "Trade and Development Report, 1998" also expects growth in Latin America to slow to 3.1%, down from the 1997 level of 5.2%. ÿÿÿÿÿThe study says that the current crisis poses a particular problem for Japan. It underscores that a severe contraction that placed banks in difficulty "would certainly lead to repatriation of dollar assets held by Japanese financial institutions, putting pressures on United States interest rates and equity prices, making debt servicing in East Asia more difficult... ." ÿÿÿÿÿOn the currency front, the UNCTAD report also floats the suggestion that debtor developing countries, facing a speculative attack on their currencies, should have the right to impose unilateral standstills on capital transactions like the trade safeguards action permitted under global trade rules. ÿÿÿÿÿIt argues that the application of insolvency principles to currency attacks offer a viable alternative in an environment marked by increasingly private external debt and political obstacles to larger bailouts. UNCTAD says it favors allowing for a standstill on debt servicing to ward off predatory investors, and give a country the breathing space needed to design a debt reorganization plan. ÿÿÿÿÿIt adds such a move would prevent the liquidity crisis from escalating into a solvency crisis. The decision to impose a standstill, says UNCTAD, could be taken unilaterally by a country experiencing a currency attack, while the evaluation of its justification could be the responsibility of an international panel. Finally, UNCTAD concludes that global surveillance and regulation have lagged behind the integration of financial markets - with increasingly costly consequences. 03:49 EDT 09/17 c 1998 Market News Service, Inc.