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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (32779)	9/24/1998 2:54:00 PM
From: Kathleen capps	Read Replies (1) \| Respond to of 132070

Thanks Mike. Gretchen M has now has an article at the NY Times Web site September 24, 1998 Seeing a Fund as Too Big to Fail, New York Fed Assists Its Bailout By GRETCHEN MORGENSON <Picture: N>EW YORK -- The Federal Reserve Bank of New York has helped organize the rescue of a large and prominent speculative fund, indicating that regulators recognize that the failure of such a fund would damage already fragile world markets. Under an agreement reached late yesterday, the fund, Long-Term Capital Management L.P. of Greenwich, Conn., received a cash infusion of more than $3.5 billion from a consortium of commercial banks and investment firms. The fund, whose founder is John Meriwether, a former vice chairman of Salomon Inc., and whose partners included two Nobel prize winners, is said to be have a portfolio worth $90 billion. The deal came after representatives of 16 banks and brokerage houses met at the offices of the Federal Reserve Bank of New York in downtown Manhattan. It is extremely unusual for the Federal Reserve to get involved in the bailout of such a fund, known as a hedge fund, a virtually unregulated type of investment firm, which despite its name, speculates in high-risk trades in markets around the world. ........rest at nytimes.com I found it interesting that this morning, the Drudge Report led with this story. Since it's a prime political view, IMO it's meaningful that they covered it -- even pushing Slick Willy into the background for a short while. Kathleen

To: Knighty Tin who wrote (32779)	9/24/1998 4:41:00 PM
From: yard_man	Read Replies (1) \| Respond to of 132070

Thought you would enjoy part of this. Look at the bolded part: UBS says market turmoil caused Q3 loss ZURICH, Sept 24 (Reuters) - UBS AG, Europe's biggest bank, said market turmoil since mid-August had caused a substantial drop in income leading to an expected third quarter loss after taxes of between 500 million ($360 million) and one billion Swiss francs. ($1=1.390 Swiss Franc) ''Net profit after tax in the second half of the year is expected to be modest,'' UBS said in a statement released before a news conference in Zurich. ''Given the extraordinary nature of most of these negative factors, however, the group's structural earnings power remains unaffected,'' it added. UBS detailed its income losses since the end of August at 630 million Swiss francs in business in emerging markets and 600 million francs in equities business. In addition, UBS said it had had to write down the value of its investment in hedge fund Long-Term Capital Management (LTCM), resulting in a charge of 950 million Swiss francs. LTCM announced on Wednesday it was being bailed out by 15 international commerical and investment banks including UBS. UBS chief executive Marcel Ospel told reporters that two-thirds of the income loss in emerging markets was from Russia. Ospel said the 600 million Swiss franc loss in equities income was due mainly to volatility swings. ''A large portion of this is likely to be won back,'' Ospel said. In contrast, he said UBS was not likely to recover ''a large part'' of the lost earnings in emerging markets business and of the LTCB charge. In the statement, UBS said the economic crisis in Asia, the collapse of Russian markets and resulting uncertainties about Latin American markets had forced interest rates sharply higher both in emerging markets and for prime issuers of debt securities. (Note: this article is ''in progress''; there will likely be an update soon.)