FW: Global jitters amidst brinksmanship

[Karen Watters Cole]

EXCERPT: Weak Growth Means Few Jobs, and Pain Is Felt Far And Wide by David Leonhardt and Daniel Altman, NYT, 10.13.02 @ http://www.nytimes.com/2002/10/13/business/13JOBS.html  (See graph from Bureau of Labor and Statistics at this url) "Almost a year after the economy began growing again, the nation continues to suffer through a broad jobs slump that has spread the pain more evenly than almost any downturn on record. Few companies have hired significant numbers of new employees, and the worrisome economic signs of the last month have caused some to announce new layoffs, making last year's recession feel to many as if it is still going on.  Despite indications that the economy is still advancing and predictions from most experts that it will improve next year, a clear majority of Americans, polls show, think that the economy is either deteriorating or remaining weak. "The economy is growing, but it feels very disappointing," said Robert J. Barbera, the chief economist at ITG/Hoenig, a technology and investment company. "The job market is moribund." EXCERPT: Optimism masking jitters over Brazil debt By Alan Beattie in New York, 10.19.02 @ http://www.nytimes.com/financialtimes/international/FT1033849139827.html   It is not much fun being a specialist in financing risky countries at a time when most investors around the world are fleeing for the security of home. The travails of Brazil, which this week raised interest rates by 3 percentage points in a bold attempt to restore confidence in its ailing currency, are looming over investors in financial markets. And while many of the professionals - who know from bitter experience how catastrophic Latin American economic crises can be - think the panic is overdone, they are acutely aware that their optimism is far from widespread. Meeting at the professional Emerging Market Traders' Association in New York this week, investment banks and fund managers were publicly confident that Brazil could avoid default on its huge public debt, even after reluctantly acknowledging that Luiz In�cio Lula da Silva, the Workers' party candidate, who has scared many on Wall Street, was very likely to be the next president. "The default risk is only 20-30 per cent over the next year," said Ruggero de'Rossi of the investment manager Oppenheimer Funds. This view contrasts with the 50-60 per cent chance of default that the markets have priced into Brazilian debt.   EXCERPT: Strong Dollar Runs Into Renewed Resistance By EDMUND L. ANDREWS, 10.18.02 @ http://www.nytimes.com/2002/10/19/business/worldbusiness/19DOLL.html WASHINGTON, Oct. 18 — To hear many American manufacturers complain, the biggest competitive threat is not China or South Korea and certainly not Europe.  It is the seemingly unsinkable value of the American dollar. Already wounded by the global economic slowdown and a severe drop in spending on new equipment and factories, American manufacturers say their plight has been made far worse by a dollar that is still more than 20 percent higher against other big currencies than it was five years ago. The government offered new ammunition today for the manufacturers' argument.  The trade deficit, which has been the highest in the world for years, surged an additional 10 percent in August, to a record $38.5 billion.  The jump was much higher than most economists had expected, though analysts cautioned that the immediate reasons were unrelated to the dollar. The high dollar has raised prices of American exports and lowered the prices of imports from Europe, Asia and Latin America.  The United States trade deficit has ballooned, not only against China and South Korea but Canada and Europe. Outgoing Mail Scanned by NAV 2002