Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Alex who wrote (23046)	11/17/1998 12:33:00 PM
From: long-gone	Read Replies (1) \| Respond to of 116762

All, Just got this, anything new we should know about? (still no room on hard drive for the reader) clev.frb.org rh

To: Alex who wrote (23046)	11/17/1998 5:28:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116762

bloomberg.com

To: Alex who wrote (23046)	11/18/1998 7:46:00 PM
From: goldsnow	Respond to of 116762

Commodity Head Defends Fund Action Wednesday, 18 November 1998 W A S H I N G T O N (AP) A TOP federal regulator on Wednesday defended her actions prior to the near-collapse of a huge investment fund, disputing a news report that she was aware of the fund's risky debt levels but failed to act. Brooksley Born, chairwoman of the Commodity Futures Trading Commission, said the routine annual information provided in March by the hedge fund, Long-Term Capital Management LP, was outdated and gave no hint of the disaster to come. "We saw no indication that the fund was about to collapse," Ms. Born said in an interview. "There was nothing about (the fund's report) ... that demonstrated potential systemic risk," she said. "This was very outdated information." The Washington Post reported in Wednesday's editions that Ms. Born knew Long-Term Capital was dangerously leveraged in March, months before it nearly collapsed and threatened to disrupt world financial markets in September. The threat prompted Federal Reserve officials to help arrange a $3.6 billion private bailout of the high-flying investment fund for wealthy investors by a group of big banks and brokerage firms. Ms. Born said in the interview that members of the commodity agency's staff reviewed the fund's report and they had no reason to bring it to her attention. She said the report showed a "normal" level of debt: about $25 borrowed for every $1 of the fund's capital, which she said was similar to that of other hedge funds and brokerage firms themselves. But Rep. Jim Leach, R-Iowa, chairman of the House Banking Committee, called such a debt level extraordinary. He said Ms. Born's agency should have shared the information with other federal regulators. "It has been my concern that there hasn't been ... adequate communication," he told The Associated Press. Leach also suggested, however, that other regulators, primarily the Federal Reserve and the Treasury Department, share the blame. "The banking regulators should have known more themselves" and acted sooner, he said. "Everyone's got egg on their face." While hedge funds are mostly unregulated, the Fed and the Treasury do have responsibility for the nation's banking system, which could be severely affected by a major hedge-fund collapse. A Treasury regulator, meanwhile, said the government should give "some level of increased attention" to banks' investments in the risky funds. Regulators need to determine whether banks are properly controlling their risks, Julie Williams, acting comptroller of the currency, told a banking audience. Arthur Levitt, chairman of the Securities and Exchange Commission, which oversees Wall Street firms such as those that invested in Long-Term Capital, said recently that regulators now are likely to require better disclosure of hedge fund investments. Rather than imposing new rules on hedge funds, Levitt said, "Disclosure is the most likely path we'd be taking." Federal Reserve Chairman Alan Greenspan and the head of the New York Fed told Congress last month that the central bank stepped in to avert potential damage to the U.S. and world economies. They defended the Fed's involvement in the rescue, which partially protected wealthy investors who had bet big on interest-rate swings and lost. Greenspan maintained that new government controls on hedge funds aren't needed at this point. But Ms. Born described Long-Term Capital's meltdown as a wake-up call that "highlighted an immediate and pressing need to address whether there are unacceptable regulatory gaps relating to hedge funds." After the Long-Term Capital debacle, Treasury Secretary Robert Rubin asked agencies making up the presidential Working Group on Financial Markets to submit a report on hedge funds. Rubin heads the group, which was established after the 1987 stock market crash and includes the Fed, the Treasury, the SEC and Ms. Born's CFTC. Long-Term Capital is one of as many as 4,000 domestic and offshore hedge funds controlling as much as $400 billion in investor equity. They are not subject to the same kind of strict disclosure and oversight rules as mutual funds because investors presumably have the resources to look after themselves. Levitt has said that other hedge funds also may be in trouble.

To: Alex who wrote (23046)	11/18/1998 8:41:00 PM
From: goldsnow	Respond to of 116762

US rate cuts may not avert major stock fall S policymakers will cut interest rates further in coming months to cushion the blow of global turmoil on the world's top economy but might not avert a major stock market fall, the Organisation for Economic Co-operation and Development (OECD) said yesterday. In its twice-yearly report, issued during a key US Federal Reserve policy meeting, the OECD said it expected cuts in the US federal funds rate to 4.50 per cent during 1999, and further if global financial turmoil deepened. At a meeting yesterday of the Federal Open Market Committee (FOMC), US policymakers were expected to cut the federal funds overnight bank lending rate by a quarter point to 4.75 per cent. Despite the projected rate cuts, the OECD said US stocks could stage fresh losses as corporate profits erode. A major drop could undermine already fragile investor confidence and push the US economy towards recession, it warned. "With labour costs running ahead of prices, the fall in profits could accelerate, raising the risk of a drop in equity prices and a significant fall in investment," the Paris-based OECD said in its report. The report forecast US growth of around 1.5 per cent next year after 3.5 per cent this year. But it said the economy should pick up as the impact of lower short-term interest rates is felt and the global environment for investment improves. Growth should reach 2.2 per cent in the year 2000. The financial crisis, which started in Asia a year and a half ago, has spread to emerging markets around the globe. With Russia's economy in a shambles and Latin America on the edge of recession, the US economy may be next in line for a shock. Plummeting global demand for exports has already dealt a blow to the US manufacturing sector. The slowdown has raised fears of a full-blown credit crunch, which could lead to a US recession if companies were cut off from capital. -- Reuters business-times.asia1.com.sg