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To: Amelia Carhartt who wrote (20146)	9/30/1998 5:19:00 PM
From: John Mansfield	Respond to of 116764

'U.S. Economy = Exxon Valdez (from c.s.y2k) From: Jo Anne Slaven <slaven@rogerswave.ca> di 18:35 Subject: U.S. Economy = Exxon Valdez Interesting article in today's Globe And Mail. I've included a few choice quotes. globeandmail.ca Goldman Sachs and the three bears Street Moves Tuesday, September 29, 1998 Andrew Willis "My table at last week's Toronto Society of Financial Analysts dinner was the scene of a telling, if unscientific, survey of the markets. As we wolfed down prime rib and waited for Goldman Sachs strategist Abby Joseph Cohen to kick off the speeches, each of us was asked to reveal where our own RRSP money was invested these days." "Two of us were faithfully throwing our savings into equities. One fellow was balanced, with a bias towards bonds. The two most experienced investors at the table, a pension fund executive and a fellow who worked for an interdealer broker, had moved all their money into cash; they made the move early in the summer. They saw nothing worth owning in this market, a funk based on unrealistic Wall Street earnings forecasts, lousy commodity markets and bankrupt Japanese banks. By the time the second bottle of wine was finished, the mood was distinctly bearish." "Against this bleak background, Ms. Cohen stepped up to the microphone and launched into a pep rally for the stock market. She compared the U.S. economy to a "supertanker, the most seaworthy of crafts," able to sail through Third World storms. One of my companions muttered "Exxon Valdez." " "Ms. Cohen did a little cheerleading for the U.S. banking system; she said it was in great shape. At this, my bearish friends started to giggle." "After Ms. Cohen took her seat, RBC Dominion Securities chief economist Paul Summerville took the stage." "Mr. Summerville illustrated working conditions on the RBC Dominion trading desk by running a slide of chained slaves pulling on the oars of a Roman galley. The economist, who worked in Tokyo and speaks fluent Japanese, summed up Asia's financial prospects with a slide of an A-bomb's mushroom cloud. Japan, he said, "is toast." " "Then Mr. Summerville got serious and predicted a North American recession by the end of 1999 -- an event that will trash equity markets -- with the risk of global depression if the current crisis in political leadership continues to fester. This dismal view played well at our table." -- Jo Anne

To: Amelia Carhartt who wrote (20146)	9/30/1998 5:34:00 PM
From: Juster	Read Replies (1) \| Respond to of 116764

Maximum fear will continue to drive money out of equities into bonds. This will keep lowering interest rates next year along with decreasing rate moves from the Fed. This will allow Brazil, Mexico and others to refinance their outstanding loans without defaulting on the banks. Just like refinancing your home at a lower rate, You can now pay off those extra bills without further outlay or you can afford a larger mortgage and have extra cash to spend on stimulating your countries economy. Cheap money will cause Inflation in the USA unless we have a severe recession. At this point, a severe recession does not look likely. So what's the best thing to own if money is cheap? GOLD! Watch interest rates. The lower they go next year the higher Gold goes. Juster