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

To: MythMan who wrote (41249)	12/28/1998 10:24:00 PM
From: Skeeter Bug	Read Replies (1) \| Respond to of 132070

myth, watching da long bond is making me hella dizzy ;-)

To: MythMan who wrote (41249)	12/28/1998 10:27:00 PM
From: Lucretius	Read Replies (2) \| Respond to of 132070

my guess is the decline should begin after Jan option expiration coinciding w/ a dollar, bond, and Brazilian fire sale. (G) I'd like to get some real good news in the next few weeks that the mkt can't push to new highs w/ and I'd feel even better about the timing. Once it gets started down this time, UNcle Al's hands should be tied and where it stops is anybody's guess. I kinda feel right now like I did this Summer... as if this rally will NEVER end. Could be a good sign, or maybe my first guesses are finally in working order (G)

To: MythMan who wrote (41249)	12/29/1998 12:28:00 AM
From: Skeeter Bug	Read Replies (2) \| Respond to of 132070

the fed's policy... Saturday December 26 7:23 AM ET Global Economic Leaders Face Daunting Task By Knut Engelmann WASHINGTON (Reuters) - A year and a half into the world's worst economic crisis in half a century, the global financial system is a sorry sight. The world's emerging economies are either in recession or teetering on the brink of disaster. Growth in top industrial economies is slowing as exports falter, keeping financial markets across the globe on edge. Solutions for the planet's myriad economic ills are in high demand but in short supply. As harried leaders struggle to come up with new ideas to fix the frazzled world financial system, chances are slim that 1999 will be a much better year for the global economy. But at least it is hard to imagine that it will be worse than 1998. ''We're going to have a substantial period ahead during which there is going to be a lot of difficulty and a lot of work to do,'' U.S. Treasury Secretary Robert Rubin said in a recent speech, sounding a distinctly cautionary note. But just at a time when global economic leadership is most sorely needed, the fault lines are running deep between financial leaders in major centers around the world. Europe, preoccupied with its planned currency union and high unemployment rates, makes an unlikely candidate for saving the world. So does Japan, struggling with a deep recession that is hurting the rest of an already ailing Asia. Meanwhile, the Group of Seven major nations, once a force to be reckoned with in global finance, has -- in the view of many observers -- degenerated into a mere debating society. A flurry of top-level meetings over the past year resulted in little more than hollow-sounding pledges to stop talking and start acting. But exactly what the course ahead will be remains a mystery to most of those flaunting grand designs for what bureaucrats have termed the ''global financial architecture.'' ''There is no international focus,'' said Lawrence Lindsey, a member of the U.S. Federal Reserve's Board of Governors until last year. ''The G7 has become nothing but a talking club.'' The Clinton administration has taken the lead in attempts to reform the world's largely unwritten economic constitution. Egged on by fear of a protectionist backlash at home, Rubin and his team have toured the globe to urge reforms needed for Asia's recovery, ask for Europe's help in boosting world growth and help prevent Latin America from becoming the next victim of a crisis that has circled the globe at breathtaking speed. But their frantic efforts to stop the tide have, at least so far, only partially succeeded. The effectiveness of a $41.5 billion dollar rescue deal cobbled together for Brazil to protect America's backyard is in doubt as the government struggles to get its finances in order. Or take Russia's economy, which was promised $23 billion from the international community but is still in shambles. The largely U.S.-controlled International Monetary Fund, in whose name the bailouts were put together, itself has come under fire for its prescriptions of harsh monetary and fiscal restraint that critics say have exacerbated rather than solved the problems faced by struggling emerging economies. Meanwhile, the work of various international commissions on more fundamental issues such as short-term speculative money flows or how to get the private sector more involved in restoring global stability remains just that -- work in progress. ''There are some real problems in the global economy,'' said David Hale, chief economist of the Zurich Group in Chicago. Mounting differences between Washington and Europe's mostly left-leaning governments, who insist on a bigger voice in such high-level groups as the G7 while touting what U.S. officials dismiss as unworkable plans to rein in free-wheeling financial markets, do not augur well for the year ahead. The squabbling is bound to worsen when Germany takes over the G7 chairmanship from Britain in January. Germany's new finance minister Oskar Lafontaine has raised more than a few eyebrows in Washington with his calls for cuts in official interest rates to help cushion an expected slowdown, a stance widely seen as an attack on the independence of the German central bank. ''The G7 might be a useful institution if you don't have excessive expectations,'' said Clyde Prestowitz, who heads the Economic Strategy Institute think-tank in Washington. ''But I have been highly disappointed by the G7.'' As economists scramble to revise down their forecast for global economic growth next year, much of the attention has shifted to Alan Greenspan, the Fed chairman who is often referred to as America's second-most powerful man. Having cut official U.S. interest rates three times this year to shield the still-solid U.S. economy from the crisis's fallout, the Fed has now moved to the sidelines to see whether its moves will keep the world's top economy on an even keel. Greenspan proved his mettle in calming jittery financial markets. But the Fed's aggressive moves have also boosted the spirits of already exuberant consumers and fed a rally in stock prices that observers inside and outside the Fed say have reached levels simply not justifiable by the economic outlook. But should the free-spending, over-indulging and highly indebted American consumer suddenly decide that enough is enough and he should start saving again, Greenspan could face a daunting task. While he does not want to inflate the bubble any further, he must prevent a U.S. slowdown that would reduce the demand for exports from abroad and thus be felt world-wide. ''The U.S. consumer keeps the world afloat. Greenspan has to try to preserve the bubble without making it any bigger,'' ex-Fed governor Lindsey said. But he added: ''It's never been done before. Historically, the chances of him succeeding are low.'' Should Greenspan fail in this almost herculean task, analysts fear dire effects not just for the United States. Zurich Group's Hale said: ''There really is no alternative to keeping the American bubble bubbling along for at least 12 more months -- it's a matter of good international policy. The reality is there's no other growth locomotive in the world.''