-Caveat Lector- from: http://www.aci.net/kalliste/ Click Here: <A HREF="http://www.aci.net/kalliste/">The Home Page of J. Orlin Grabbe</A> ----- International Bureaucracy Larry Summers Rushes to Save IMF by Advocating "Reform" Charles Wyplosz says that using the IMF as a tool of Russia diplomacy is shameless. Gee, I was in Harvard grad school with both these guys. Wonder what they think of this. Larry Summers, US Treasury Secretary, on Tuesday proposed scaling back the role of the International Monetary Fund to allow the private sector a greater role in providing finance to poorer countries. In a speech given to the London Business School, Mr Summers said the IMF had to reflect changes in the global financial system, and focus on preventing and responding to international financial crises. The US plan is partly a response to the lessons of the Asian financial crisis, but it also marks an attempt to stave off critics in the US Congress who have threatened to cut off funds for the IMF over its multi-billion dollar support for Russia. Mr Summers called on the IMF to focus on its "core competencies" by giving up the provision of long-term finance to countries that ought to be able to use private sector sources. "The IMF cannot expect its financial capacity to grow in parallel with the growth of private sector capital flows," he said. "It should not be a source of low-cost financing for countries with ready access to private capital, or long-term welfare that cannot break the habit of bad policies." Mr Summers said the IMF should concentrate on providing short-term financing for countries threatened by balance of payments problems, financial contagion or market panics. He proposed that the IMF should do more to collect and share financial information, and to disseminate that information to global markets and investors. It should promote better assessments of whether countries are likely to run into trouble, for example by running unsustainable exchange rate regimes. But he said the goal should be for emerging market economies to "reach the point where calling on the IMF for financial support is unthinkable". Other countries' finance ministries were last night studying Mr Summers' speech, but his ideas are expected to get a generally favourable reception. "We have made our own proposals for strengthening surveillance of codes and standards, and greater involvement of the private sector in the prevention and resolution of crises," a UK Treasury official said. The IMF said it had read Mr Summers' proposals "with keen interest". Mr Summers paid tribute to the "imaginative leadership" of Michel Camdessus, outgoing managing director of the IMF, but the signs in Washington are that the US administration would like to see a clear break with his 13-year term. In a valedictory interview with the internal IMF Survey, Mr Camdessus stressed the central importance of poverty reduction to the IMF's mission. Mr Summers has refused to be drawn on US feelings about Mr Camdessus' successor, but it is thought the administration lacks enthusiasm for Caio Koch-Weser, German deputy finance minister. Economists have welcomed US efforts to reform and refocus the IMF towards its original objectives. But some have suggested that the United States itself has been a big part of the problem. Charles Wyplosz of the Centre for Economic Policy Research, a Geneva-based economist who has worked for the IMF, said: "The US has shamelessly used the IMF as a conduit for its diplomacy towards Russia." The Financial Times, December 15, 1999 Fear 2000 Europe is Not Afraid of Y2K Either No light and heat problems that can't be handled by a simple auto-da-fé. LONDON - As a supplier of generating equipment and heavy machinery to about 30,000 power plants, oil and gas installations and factories, ABB Asea Brown Boveri Ltd. faced no small challenge in preparing itself for the Year 2000 computer bug. The Swedish-Swiss engineering company has spent the last three years painstakingly investigating 6,000 of its products along with more than 3,000 component systems from other suppliers. The results have been encouraging. Only 10 percent of those products had millennium bug problems, and ''the majority was of a cosmetic nature,'' said Klaus Ragaller, senior vice president for technology evaluation. ''We are confident there will be no problems,'' Mr. Ragaller said. With little more than two weeks to go before the dawn of the 21st century, that view is widely shared across Europe, as it is in Asia. From the power grid to the air traffic control system, telecommunications companies to banks, the vital infrastructure of the European economy has been reviewed, repaired where necessary and tested, and should run smoothly over the date change, according to corporate executives, government officials and information technology experts. ''It is indeed expected to be business as usual,'' the European Commission said in an October report on the state of the transportation, energy, telecommunications and financial industries. Inevitably, there will be problems from computers or embedded chips that, because they use only two digits to identify the year, fail to recognize the change from 1999 to 2000. Those problems are most likely to occur in small and medium-sized companies and in the public sector, officials say. But in most cases, the problems will involve delays or mistakes rather than outright failures and major disruptions, according to Gartner Group, a leading consultancy on Year 2000 preparations. ''We expect there to be a marginal increase in the hassle factor for computer systems in the next few weeks,'' said Andy Kyte, research director at Gartner Group. Action 2000, the British government's bug-busting agency, predicts problems with perhaps 5 percent of data-related functions, a rate that is comparable to what large companies experience when they install new software systems, said Don Cruickshank, the agency's director. Britain was one of the first countries to make the millennium bug a top priority, and Action 2000 estimates that business and government have spent £20 billion ($32.42 billion) to fix the problem. But the real turnaround in public awareness came only last year, Mr. Cruickshank said, when corporations and public bodies put senior managers in charge of remediation efforts, and erstwhile competitors began sharing information about problems and solutions. Information from countries like Britain, the United States and the Netherlands, much of it posted freely on the Internet, has helped other countries speed their efforts. ''One and a half years ago, Germany was a big concern, southern countries and France, too,'' Mr. Ragaller said. ''But these lagging countries caught up.'' But many experts have criticized Italy, saying it is the least prepared major European country. ''We have been a bit behind, but I think we are catching up to European standards,'' said Enrico Giacomelli, chief executive of Softsand, an Italian software manufacturer. ''We have had a bit of a cultural gap, but remember, the Italians always get things done, even if by the last minute.'' At Eurelectric, the association of European electricity companies, executives said their confidence in being able to maintain power production has grown as companies have shared information. To ward off potential problems, each region within the power grid will double its standby reserves to be able to cope if its two biggest power plants shut down. Most companies also will have extra staff working over the date change - 10,000 at Electricite de France alone. The Financial Services Authority of Britain last month reported that banks, brokers and financial markets - which have invested the most of any industry in Y2K efforts - appeared set for a smooth transition. The biggest headache was making sure that 60,000 workers would be able to get in and out of the City of London over the date change, when roads will be blocked off and public transport is expected to be inundated with New Year's revelers. Concerns about aviation have largely receded, reflecting active remediation efforts and slower-than-normal traffic over New Year's. ''There are no areas where we have a high level of operational concern,'' said Thomas Windmuller, director of the Year 2000 program at the International Air Transport Association. In Britain, BAA PLC spent £51 million to fix or replace 25 percent of its computer systems, but the company will shut two of its seven airports for lack of traffic Dec. 31. It foresees no problems at London's Heathrow or Gatwick airports. British Airways will have barely a dozen of its 340 planes in the air at midnight. But the biggest concerns surround small and medium-sized companies. The European Commission reported that although telephone networks appeared to be in good shape, ''vulnerabilities are very likely to exist in customer premises'' at small companies. Some German surveys have indicated that 10 percent to 20 percent of small businesses had yet to prepare for the date change, but Bernd Weismann, head of the Y2K unit at the Economics Ministry in Berlin, said, ''We don't expect bankruptcies in a significant way.'' In France, where only 50 percent of companies with fewer than 10 employees have taken steps against the bug, the government warns of possible glitches at sales terminals and computer systems of shops, hotels and restaurants. ''There will be bread and croissants on the first of January 2000, but it's not certain that you will be able to pay by bank card,'' Marylise Lebranchu, secretary of state for small business, told a recent conference. International Herald Tribune, December 15, 1999 Digital Society Investment Bankers Just Hired Guns for Information Magicians Internet steals all the gravity (not to mention the gravy). Even by the inflated standards of high finance, Wall Street is overflowing with holiday cheer this year. Investment banks have set aside $13 billion to pay bonuses, 20 percent more than last year, with pay packages above $10 million no longer a rarity. Yet among Wall Streeters whose incomes once astounded Middle America, the mood has changed. One industry veteran bemoaned the ''opportunity cost'' of remaining a financier in the Internet Age. Others are leaving to join on-line start-ups, technology companies and venture capital firms, the pillars of the new economy, where they sometimes take home more than their old bosses from Day 1 - and, they say, have more fun. For the first time since Wall Street became the surest professional path to riches during the frenzied 1980s, those with the biggest paydays are former investment bankers. Like Timothy Weller. He is the talk of the Street, but mostly because he no longer works there. Last summer, Mr. Weller, 34, left Donaldson, Lufkin & Jenrette Inc., where he was a middle-ranking analyst tracking the telecommunications business, to join Akamai Technologies Inc., which provides networking services for the Internet. Akamai, based in Cambridge, Massachusetts, enticed him to sign on as chief financial officer by selling him 1.05 million shares, valued then at $2.63 million, and even lent him the money to buy them. Gratification was quick: When Akamai went public in October, its stock soared from $26 to $230. Mr. Weller's stake is now worth $240 million Few bankers will reap such gains, but many are still taking their chances on the Internet. The onetime masters of the universe say banking has become prosaic, with the heavy demands no longer producing unrivaled rewards. Bankers now ogle on-line entrepreneurs the way lawyers and accountants once envied Wall Streeters. ''It used to be that investment bankers were at the cutting edge,'' said Mark Long, who as a banker for Credit Suisse First Boston helped some of America's hottest Internet companies go public. ''Today, bankers are just hired guns.'' During a trip to promote the Internet start-up Intraware Inc. to potential investors, Mr. Long, 32, accepted his client's offer to become a vice president, joining shortly before it went public. If Intraware does well, Mr. Long stands to earn considerably more than he did as a banker, thanks to stock options. But that is only one reason he left. ''You get tired of sleeping 45 minutes a night to sell someone else's business,'' he says. With profits for financial companies and bonuses for bankers at all-time highs, there is certainly no looming crisis on Wall Street. Even those who leave banking often do so with trepidation, fearing that inflated Internet stocks could come crashing down. The pressure to earn Internet windfalls shows up in little ways, as with the rising stock analyst who says he has lost repeated bidding wars for Upper East Side apartments and adds, only half in jest, that $10 million does not buy much of a condo these days. The on-line lure is enhanced by former bankers who have changed careers seamlessly. Jeff Bezos worked on Wall Street until he founded Amazon.com, and that trend keeps gathering steam. Mr. Bezos, now many times a billionaire, hired a number of other former bankers and made them into Internet retailers. Some defectors compete directly with their old firms. At least three new on-line investment banks and several Internet stock-and-bond trading companies, all planning to use the Internet to steal business from traditional investment banks, are led by people who learned the business from the inside. Robert Lessin, chief executive of Wit Capital Group, an on-line investment bank, and formerly a top officer at Salomon Smith Barney Inc., has poached a long list of bankers from Salomon, Merrill Lynch & Co. and other firms. Especially susceptible are those who are three to five years out of business school - on the cusp of devoting a career to a company, but young enough to start fresh. ''They say, 'I want to be a multimillionaire by the time I'm 30, but if I stay at Morgan Stanley, it may take me until I'm 50,''' said Joseph Perella, Morgan Stanley Dean Witter's head of investment banking. Americans, he added, want ''instant gratification.'' Not long ago, Wall Street did not have to try so hard. With the rapid growth of stocks and bonds and the explosion of mergers, securities firms were seen as controlling the levers of America's economy. Investment banking, offering top dollar, consistently ranked as the No. 1 or No. 2 career choice for top business graduates. But the Internet, like an electronic black hole, has stolen all the gravity. International Herald Tribune, December 15, 1999 Ä ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, All My Relations, Omnia Bona Bonis, Adieu, Adios, Aloha. Amen. Roads End DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance—not soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRL gives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credeence to Holocaust denial and nazi's need not apply. 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