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To: John Barendrecht who wrote (19220)	9/18/1998 5:40:00 AM
From: Alex	Read Replies (2) \| Respond to of 116764

VOLATILITY IS THE NAME OF THE GAME FOR NOW By JOHN CRUDELE ------------------------------------------------------------------------ BILL Clinton will be forced out of office. But it won't happen quickly or without a lot of disruption to the country. That's my opinion, based on years of research and many recent conversations with people who are in a position to understand what is going on. Wall Street isn't nearly as clear on the outcome. The investment community has been grappling with the fate of Clinton this week and it was of two minds. First, there were four days (starting last Friday) of nice market rallies after the report from Ken 035 . 0000.00Starr was released. Investors figured that all the bad news was out and they the pushed stocks higher. It also helped that this was one of those usually bullish options expiration weeks. Yesterday Wall Street suddenly changed its mind about the Clinton scandals. The Dow Jones industrial 035 . 0000.00average declined more than 200 points in the first half hour of trading when it became clear from the morning papers that the Republicans in Congress were going to release more dirt on Clinton. And stocks remained lower as Wall Street waited all day to see just how much of Starr's background papers were going to be made public. No decision was made yesterday, and sources say the material could be released as early as today. Investors can expect this sort of tug-o-war over the next few weeks and 035 . 0000.00months. Here is a list of scandal-related events that'll pull the market down. These will be interspersed by periods of calm, during which the market will probably attempt to rally. The first trouble spot for the market will be when the tapes of Clinton's grand jury testimony are actually released. This could happen at any moment. Everyone knows that the tapes will contain questions about sex. And if that's all that is on them, Wall Street will yawn. No matter how graphic, Wall Street won't react. 035 . 0000.00But I'm told there are embarrassing non-sex questions as well. For instance, I've already written that Starr's investigators have asked in the past about possible Clinton drug use. And I've written that Linda Tripp was suspicious such illicit activity was going on in the White House. So it isn't inconceivable that Starr would have pursued this line of questioning with Monica Lewinsky and with Clinton before the grand jury. In fact, two reliable sources say this is the line of questioning that bothered Clinton a lot. 035 . 0000.00As I wrote earlier this week, Congress will soon be getting another impeachment report from Starr. This one won't make any best-of-porn lists but it will detail a lot of instances of abuse of power (including the White House's use of FBI files for their own purposes) and obstruction of justice, including the hiding of people who could embarrass the president in cushy government jobs and in private companies. Some big shots in the entertainment community could get whacked for this. My guess is that this re035 . 0000.00port is only weeks away from completion. This is the second big event for the market. Third, there is the coming report by Starr to the three judges to whom he reports. That'll give details of Clinton's life in Arkansas, complete with a lot of financial wrongdoing. This'll be heavy on crimes like fraud, obstruction and perjury but will put everything under the umbrella of racketeering. If Starr makes specific allegations about an organized crime operation - and I think he will - Wall Street had better watch out. Bill Clinton will probably be named as an unindicted co-conspirator. Hillary Clinton will probably be indicted for crimes during the Arkansas days, as 041 . 0000.00well as obstruction that occurred in the White House. And just in case all of this isn't enough to bother Wall Street there will be indictments. Many indictments. Of people very close to the president and, probably, some private citizens who most Americans will recognize. There will also be the counterattacks from the White House. Rep. Henry Hyde had an affair 30 years ago. And there will be your run-of-the-mill DWIs. Maybe someone took a leak in a park. In short, Wall Street will soon come to realize that this is going to be messier than anyone could have guessed. And investors already have quite a mess to clean up. Russia, Japan, Latin America. Funding of the International Monetary Fund. Slowing corporate profits. 041 . 0000.00Bill Clinton is right to say that none of these problems will be addressed if Washington keeps focusing on the scandals. But that's the way it is going to be - scandals to the exclusion of everything else. I know what you're thinking: Cooler heads will prevail and Washington will find a solution to the political crisis. Maybe, but it'll be difficult. Short of receiving a full pardon for crimes known and not yet known, Bill Clinton can't afford to quit. He'll end up prosecuted as a private citizen if he misjudges the situation. And Al Gore can't afford to offer a full pardon. Wild swings up and down. That's Wall Street's near future.041 . 0026.01 -00002