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Politics : Clinton -- doomed & wagging, Japan collapses, Y2K bug, etc -- Ignore unavailable to you. Want to Upgrade?

To: SOROS who wrote (923)	12/29/1998 7:30:00 PM
From: Sidney Reilly	Read Replies (4) \| Respond to of 1151

www2.gvsu.edu

To: SOROS who wrote (923)	12/31/1998 9:35:00 PM
From: SOROS	Respond to of 1151

Should people REALLY be buying AOL, AMZN, YHOO at current prices? Global GDP growth fell by half to less than 2% and the world teetered on the edge of the WORST FINANCIAL CRISIS since the 1930s. Russia defaulted on its domestic debts in August; Long-Term Capital Management, a big hedge fund, nearly collapsed. Fears of a global credit crunch were eased only after America's Federal Reserve cut interest rates three times. + DEFLATION surfaced. In dollar terms, commodity and oil prices sank to levels not seen since 1986. In real terms, The Economist industrials commodity price index fell to its lowest since the 1930s and oil prices to their lowest in 25 years. Even the prices of finished goods fell in several countries, squeezing the average inflation rate in the G7 economies to a 40-year low. + As international capital flows dried up, the EMERGING ECONOMIES submerged. Much of East Asia plunged into deep recession; Russia's economy imploded; and, by the end of the year, Brazil's economy was shrinking, after $30 billion had been spent defending its currency. Such was the demand for financial rescues that the IMF almost ran out of money; but at the last minute America's Congress approved new funds. + JAPAN'S ECONOMY went from bad to dreadful. By October, it had contracted for four quarters in a row, despite umpteen fiscal-stimulus packages. The Nikkei average tumbled to 12,880 in October, its lowest level for 13 years. + Most of the other RICH ECONOMIES flourished. America's economy expanded by an estimated 3.5%, driven by falling import prices and rampant consumer spending on the back of stockmarket gains. Wall Street plunged by 20% during the summer, but it then recovered, to leave the Dow up 17% over the year. + ASIAN BANKS wobbled. In Japan, the passage of a Yen60 trillion ($500 billion) bank-aid package allowed the government to nationalise Long- Term Credit Bank and Nippon Credit Bank, two of the duffest lenders. The two insolvent banks had assets equal to 7% of Japan's GDP. In China GITIC, a big investment group, collapsed.