August 28, 1998
Russia's faltering economy has sparked major market sell-offs in Europe, Asia and America. Is this simply a fact of the new global economy or the beginning a major world-wide recession? Following a background report, four experts discuss the drop in the global markets and its possible implications.
JIM LEHRER: Spencer Michels begins our financial coverage.
A RealAudio version of this segment is available.
August 28, 1998:
A panel of experts debate instability in the international markets.
Join in an Online Forum on Russia's economic and political turmoil.
August 27, 1998:
The Dow falls 357 points.
August 26, 1998:
Russia's economic situation drives down markets around the world.
August 24, 1998:
Boris Yeltsin sacks his government.
July 13, 1998
International lenders agree to loan Russia over $22 billion.
May 28, 1998
Russia's government tries to maintain the value of the ruble.
April 24, 1998
After two tries, Sergei Kiriyenko is confirmed as Russia's Prime Minister.
March 23, 1998
President Yeltsin sacks his cabinet.
The Russian Government Information Network.
International Monetary Fund.
The Russian crisis worsens.
SPENCER MICHELS: In Moscow, emotions ran high -- for the fifth day in a row panicky Russians tried to withdraw their savings from banks, while the country's financial system appeared to teeter on the brink of collapse.
On orders from the central bank, all ruble for dollar trades were suspended for a third day. The currency market will be frozen through the weekend. Idle traders at the Moscow Interbank Currency Exchange spent their time playing computer games. The head of the exchange said he hoped regular operations would resume soon.
ALEXANDER ZAKHAROV, General Director, Moscow Interbank Currency Exchange: (speaking through interpreter) We are all waiting positive news, we are waiting for political stabilization, we are waiting for concrete economic and political decisions and I think we are all hopeful of hearing such announcements.
SPENCER MICHELS: Again today, the financial crisis in Russia was coupled with the political. President Boris Yeltsin returned to Moscow to conduct business, including firing two symbols of economic reform: Boris Nemtsov and Anatoly Chubais.
Chubais was Russia's key government negotiator with international lenders. He had obtained the recent $22.6 billion emergency bailout. Yeltsin later went on television to announce he would remain in office through the year 2000. And throughout the day and night, Yeltsin aides and communist deputies in the parliament were negotiating possible new power sharing arrangements.
The deputies want communist-style new economic policies, including currency controls and more nationalized industries. But few Russians believe a remedy will come soon -- no matter who's in charge.
MOSCOW RESIDENT: (speaking through interpreter) Should the president resign because of the situation? Yes, I think he should but the situation won't change as a result. It's not the president who's at fault.
The ripple effects.
SPENCER MICHELS: Around the world news from Russia helped push down markets. Soon after trading began in Japan -- the world's second largest economy -- Tokyo stocks plummeted 3.5 percent of their value, dropping to the lowest level in 12 years. Today Japan's prime minister -- Keizo Obuchi - tried to ease investors' fears.
KEIZO OBUCHI, Prime Minister, Japan: (speaking through interpreter) As for financial administration, we are determined to conduct transparent and fair administration based on accurate rules. We make financial institutions abide by market disciplines and take thorough responsibility. This has to be done to gain markets' confidence."
SPENCER MICHELS: In Hong Kong, stock market transactions were at record volume. In an effort to counter investor sell-offs, the government was buying stocks. But the value of shares fell 1.2 percent, nevertheless.
In Europe, on the London Stock Exchange -- Europe's biggest market -- shares made a recovery from their lowest point in early trading but still dropped 2.2 percent to a seven-month low. British stocks lost a total of $34 billion in value. In France, the market was down 1 percent, and in Germany, the losses were between 1 and 2 percent.
In New York, where the stock exchange had lost 357 points yesterday, today actually began on an up note, but as the day wore on the Dow Jones Industrial Average lost ground and finished down 114 points, for a drop of 482 points for the week, 5.6 percent of its value.