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Non-Tech : Derivatives: Darth Vader's Revenge -- Ignore unavailable to you. Want to Upgrade?

To: Henry Volquardsen who wrote (267)	9/30/1998 8:30:00 AM
From: Stitch	Read Replies (1) \| Respond to of 2794

Good Morning Henry, Are these lessons some that I don't need? Every once in a while an agency will issue a report, or a journalist will write a story, whose underlying theme is that the world's economy is crumbling underneath us. If true, then at some point perhaps an understanding of hedge funds and derivatives become a senseless intellectual pursuit. I refer to the following story posted on the Asia Forum: I would be curious to hear from knowledgeable insiders like yourself what sorts of regulation should be considered to avoid a repeat. For example: could Thailand's meltdown (the assumed Asian crisis trigger) have been avoided with appropriate restraints? I am dubious that any amount of regulation would actually prevent the dire consequences of human folly. Whatever the pursuit. Best to All, Stitch World Bank: Asia Could Get Worse By HARRY DUNPHY Associated Press Writer WASHINGTON (AP) _ The World Bank has a bleak view of Asia's financial crisis: It is severe; it could get worse and global economic expansion may be threatened. Children in the region are dropping out of school, families are going hungry and teenage girls are being pushed into prostitution, the bank said in a new report on Asia issued Tuesday. ''One year after it began, the economic storm in East Asia is still gathering momentum,'' the report said. ''The crisis has spread to financial markets around the world and now poses risks to global expansion.'' As investors fear Asia's meltdown will spread to Latin America, the bank warned that the financial crisis has taken on ''systemic proportions'' in Thailand, Indonesia, South Korea and Malaysia with many banks and companies bankrupt or hovering on the brink. The report said Indonesia remains unstable. ''These events, left unchecked, threaten to engulf the whole of East Asia and could even imperil the otherwise robust expansion of the world economy,'' said the report, entitled ''East Asia_ the Road to Recovery. '' It was released on the first day of the annual meetings of the bank and the International Monetary Fund, which run through Oct. 8. The Asian financial crisis and dealing with ways to prevent such eruptions in the future are expected to dominate the agenda of these meetings, which bring together finance ministers and central bankers from 182 nations. Several nations have called on the United States to show leadership in reforming the international financial system to prevent massive flows of investor capital in and out of countries from producing more financial crises. The report suggests international financial institutions like the bank and the IMF may have done more harm than good when they tried to rescue Asian economies 14 months ago as the crisis began. ''Questions have arisen about early rescue packages led by multilateral institutions. Were they overly contradictory and did they inadvertently push economies deeper into recession?'' the report asked. Presenting the report, Jean Michel Severino, World Bank vice president for East Asia and the Pacific, said: ''The standard of living of a whole generation is in the balance.'' Severino said the bank was nearly tripling spending on projects aimed at helping the poor from $700 million to $2 billion in the current fiscal year. He said the bank was encouraged by President Clinton's call Sept. 14 for a substantial increase in this spending. The report said the most urgent task in the region is restoring conditions for robust economic growth but that job won't be easy. Richard Newfarmer, main author of the report, said three main factors will shape the recovery: the rate of expansion of the global economy; Japan's economic performance; and events in emerging markets. Japan, the world's second largest economy, has come under pressure from the United States and other G-7 countries to stimulate consumer-led growth to solve the $1 trillion bad debt problem in its banks. dailynews.yahoo.com.