In this issue:

London Source: Fed Does Biggest Stock Market Save Ever

Deutsche Bank Chief Admits: 'We Are in a Deep Swamp'


From the Vol.1, no.22 issue of Electronic Intelligence Weekly

WORLD ECONOMIC NEWS

London Source: Fed Does Biggest Stock Market Save Ever

"Without massive central-bank intervention, we would have seen a total market meltdown already," a senior financial source in London told this news service, Aug. 1. What we are seeing since July 24, he said, is the biggest stock-market intervention by the Federal Reserve, ever, and other central banks are playing along. In the markets, since, there has been nothing but intervention. Had the markets been left to themselves, we would have been in the endgame, already, but the endgame will come, nevertheless.

The basis for that is an understanding reached at the top levels of the U.S. government and the Federal Reserve, that it is only market intervention can prevent immediate Armaggedon. And the decision has been made to do anything, whatever it takes, to prevent a meltdown of markets before the November U.S. midterm elections. The economic-financial crisis must not be the central theme of the political debate in the U.S., and if the market interventions alone don't do it, there is still the war option.

However, the source continued, it will have the opposite effect, and recommended that the figures released by the Bureau of Statistics in Washington July 31, be carefully examined, because this will show that the government's numbers are as crooked as those of Enron.

Secondly, the source pointed out, is that an understanding has been reached, that if the truth were told, concerning the 1,000 or so major U.S. corporations, nothing could stop a market breakdown. So, you are going to see massaged figures on Aug. 14.

The source added that, there were a number of additional elements concerning the financial situation, which, in and of themselves, a few weeks or months ago, would have meant a major disaster. Watch the pattern that is now occurring: We are now seeing the reverse of mergers and aquisitions, that is, corporations are manipulating earnings by selling off assets. From the age of fusion, we have entered the age of fission in corporate activity. The massive pattern of selling off sections of corporations is just extraordinary.

Deutsche Bank Chief Admits: 'We Are in a Deep Swamp'

Deutsche Bank's chief economist has now admitted that the global economy is in deeper crisis than previously acknowledged. In an exclusive interview for the Aug. 1 issue of the German business weekly, Wirtschaftswoche, Norbert Walter said that he sees "structural similarities" between the present financial bubble, and that of the Great Depression following the 1929 Crash.

The bottom may not have been reached yet, and a continuation of the downward spiral of world stock markets cannot be ruled out, he said. There has been a "salami crash" in the U.S., and Alan Greenspan no longer has the power to play god for the markets: "The icon has lost its halo."

In stark contrast with his usual neo-liberal nostroms, Walter called on the European Central Bank to "lower the interest rates," and on the "EU to think about a more appropriate handling of its stability and growth pact." Walter added that he is "not against Keynes, if a Keynesian situation has arrived, and that the Germans should think of moving up planned infrastructure projects for the years 2003-2005, into this year.

All of that is necessary, he added, because "we are, indeed, in a deeper swamp than is signalled by the debate that is being conducted at present."

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