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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Bill Shepherd who wrote (8953)	1/13/1999 11:05:00 AM
From: Jeffrey D	Respond to of 42834

Bill/all, Mr. Rubin sees a long recovery period for the world economy. What is interesting are the countries he does not mention as needing attention. No South Korea, no China and no European countries. Jeff << Rubin Predicts Reform Struggle -------------------------------------------------------------------------------- Story Filed: Wednesday, January 13, 1999 10:42 AM EST WASHINGTON (AP) -- Saying there are no ''quick answers'' for what ails the global economy, Treasury Secretary Robert Rubin predicted a prolonged period in which policy makers will have to struggle to implement necessary reforms. In a wide-ranging interview, Rubin listed Brazil as among the chief concerns at the moment while also pointing to the economic mess in Russia and Japan's continuing struggles to right its own economy. Global markets, which had gone through a period of relative calm following a tumultuous fall, were rocked again today when the head of Brazil's central bank abruptly resigned and his replacement effectively devalued the country's currency by 8 percent. The Dow Jones industrial average was down more than 250 points in the first half-hour of trading as investors worried that events in Brazil could trigger another round of turbulence in emerging markets around the world. Rubin, who met with reporters Tuesday before the latest crisis in Brazil, said that a lot of hard work remained to be done to reform the global financial system. ''People have looked for magic wands and quick answers and there are no magic wands and there are no quick answers,'' Rubin said. Speaking about Brazil on Tuesday, he refused to discuss what the United States and other rich nations would do if the $41.5 billion rescue package put together by the International Monetary Fund last November begins to unravel. The international support was provided to Brazil under IMF terms that required Brazilian President Fernando Henrique Cardoso to impose an economic austerity program, something he has had trouble winning political backing to implement. ''The Brazil program should work,'' Rubin said. ''Politics is obviously the key.'' As other potential trouble spots, Rubin listed Russia's economic travails, Thailand's efforts to deal with debt-laden corporations, Indonesia and the open question of whether Japan will be able to put together an economic pump-priming program that will pull it out of its worst recession in 50 years. Even with the stock market turbulence, the U.S. economy so far has been able to weather the foreign storms, with a rising trade deficit the only blot on an economic expansion that in December became the longest period of uninterrupted peacetime growth in U.S. history. For 1999, Rubin said he held the same view as private economists that the economy may slow a bit but still turn in a healthy performance with low inflation. Rubin ducked a question about whether he was concerned that foreigners could become spooked by a lengthy impeachment trial and start pulling their investments out of the United States. Instead of worrying about that, Rubin said it was important for the administration to continue pursuing sound economic policies, including reforming Social Security and protecting the budget surpluses. President Clinton ''has been enormously focused'' on preparing the new budget, Social Security reform and the international economy, Rubin said. These are the types of issues that will have a big role in determining ''the confidence of foreign investors in our economy,'' he said. The fact that Rubin, the 26-year Wall Street veteran, has stayed around to guide Clinton's economic policy, has also been seen as a key to the rebound on Wall Street. Asked about his plans in 1999, Rubin indicated he was staying put. ''I am focused on the issues in front of me and that has been my focus,'' he said. Rubin said it was far too soon to declare that the economic crisis that began in Thailand in July 1997 has finally bottomed out. ''I don't have a crystal ball and I don't have a lot of confidence in other people's crystal balls,'' he said. ''What you can do is identify the issues you need to work on and just keep working at the problems that lie ahead. That is what we have been doing.'' >>