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News briefs, part 2

Japan Spends Billions To Prop Up Share Prices

The Washington Post


For months, a remarkable calm has descended over the Tokyo stock market, contrasting starkly with last summer's nerve-wracking decline. But the tranquility may be deceptive, for it is largely the result of a government scheme to prop up share prices, according to market participants and government officials.

In a striking illustration of Japanese-style interference in the marketplace aimed at furthering the national interest, the government has been pumping billions of dollars into stocks through giant public pension, insurance and savings funds. These funds often issue a flood of buy orders to keep market indices from falling below key psychological barriers, traders say.

This sort of bureaucratic manipulation of investment firms would evoke scorn or even outrage in New York, London or other financial centers. Here, it is shrugged off as a fact of life, a compromise with laissez faire principles that the authorities make as a matter of course when the market's stability is threatened.

The market stabilization effort is starting to draw attention as questions arise over how much longer the government will -- and can -- keep it going. Some analysts fear that pressure is building for a new crash.

So far, the PKO has put a floor under the Nikkei market index between 16,000 and 16,500 points, comfortably above the 14,000-point barrier it was approaching last August.

Government officials are hoping to hold up share prices up at least until March 31, because on that day, Japanese banks must meet new international standards requiring them to hold a capital cushion with a value at least 8 percent of their outstanding loans and other assets. The value of their stock portfolios will determine whether their capital cushions are big enough, and failure to make the grade would require a bank to curb its lending activities.

But pressure is mounting for the government to ease up its PKO activities as soon as possible, because paradoxically, the market-supporting effort is threatening to drive some of Tokyo's smaller stock brokerage firms into bankruptcy.

Struggle for Krajina Intensifies Between Serbs, Croats

The Washington Post

ZAGREB, Croatia

Serb rebels exchanged heavy artillery fire with Croatian government troops along a 30-mile front near the Adriatic Sea Monday in what U.N. officials fear is a steadily intensifying struggle for the disputed Krajina region.

The fighting flared after a relative lull over the weekend, when Croatian soldiers and civil engineers scrambled to plug holes in a dam weakened by an earlier firefight and while the combatants throughout former Yugoslavia pondered the consequences of a threatened U.N. pullout.

Since Croatian troops broke a year-old cease-fire Jan. 22 by invading the Serb-occupied Krajina region, U.N. peacekeepers have been powerless to deter the spread of fighting and have been exposed to increased danger from the cross-fire.

U.N. Secretary General Boutros Boutros-Ghali warned last week that he may order a withdrawal of the 25,000-troop peacekeeping mission here in view of the escalating violence.

A Geneva peace conference on the conflict in neighboring Bosnia-Herzegovina collapsed Saturday after five months of fruitless negotiation mediated by U.N. and European Community officials, heightening fears that the Balkan combatants are poised for a wider, uncontrollable bloodletting.

Brutality against civilians in the 18-month-old war has shocked the international community. Tens of thousands have been killed, 2 million are homeless and untold thousands of others have been tortured or raped.

The Serb-dominated rump federation of Yugoslavia, consisting of Serbia and Montenegro, has already been saddled with wide-ranging U.N. sanctions for fomenting Serb uprisings in Croatia and Bosnia.

Some foreign powers, primarily Russia, have also appealed for sanctions against Croatia since its incursion into the Krajina to retake territory lost during a six-month Serb rebellion in 1991.


Brief Respite

By Arnold Seto

As higher pressure builds into the area, our chance of snowfall will diminish.

Strong northerly winds will continue for today, keeping our temperatures well below freezing. The high pressure will dominate Wednesday, increasing our temperatures to the mid-30s. Another frontal system may approach Wednesday night or Thursday morning, bringing colder weather and a chance of snow flurries.

Today: Clearing, windy. High 17-22F (-8 to -6 C).

Tonight: Clear, winds decreasing, 8-12 mph. (13-19 kmh) Low 15-20 F (-9 to -7 C).

Tomorrow: Mostly sunny, winds 5-10 mph (8-16 kmh). High 30-35 F (-1 to 2 C). Markedly colder in the evening. Low 15-25 F (-9 to -4 C).

Thursday: Partly cloudy and cold. Fairly windy, 20-25 mph (32-40 kmh) northerly. High in the mid 20s (-6 to -3 C). Low 10-15 F (-12 to -9 C).

Governors Are Suspicious During White House Talks

The Washington Post


President Clinton has rolled out the White House red carpet for his old buddies, the nation's governors. They're just hoping they don't find, once again, an open trapdoor underneath it.

At his first state dinner Sunday evening, the former Arkansas governor told the members of the National Governors Association (NGA), and their spouses, "I intend to do my very best to be faithful to the lessons that I learned as a governor -- that most of what you do ought to be done by you and not by us."

Monday, Clinton followed through on that rhetoric by approving the governors' request for broad and quick grants of authority to waive federal regulations and conduct their own experiments in delivering better medical care to the needy at lower cost.

But interviews with a dozen governors of both parties disclosed a lurking suspicion that for all his professed good intentions, Clinton may fall victim in time to what Illinois Gov. James Edgar (R) called "Potomacization."

Neither of the previous governor-presidents, the state executives complained, stood up to Congress when lawmakers mandated new health, education or social welfare spending and forced the states to pick up the bills.

With the election of Clinton, many of the governors said, there is an opportunity for a new era of federal-state relations. But they are keeping their fingers crossed.

Passengers Test New Tilt Train

The Washington Post


Don Jilson is a Conrail engineer assigned to move local freight trains on low-speed branch lines around upstate Watkins Glen. Monday, as a courtesy, he was allowed to ride in the cab of a new Swedish tilt train gliding across New Jersey flatlands at 125 mph.

Jilson was among the first 190 paying passengers on a three-month test of the high-speed X-2000, which joined regular Washington-New York Metroliner service. Officials hope to determine whether faster, smoother trains can be introduced on current U.S. track without massive expenditure for new French- or Japanese-style systems.

The train has done 155 mph in tests but is limited to the same schedule and top speed, 125 mph, as the current Metroliner. Amtrak plans one Metroliner round-trip daily Monday through Friday, charging coach fares although the interior is configured as first class.

Amtrak has requested an exemption from the Federal Railroad Administration to allow 135 mph top speeds that, combined with faster curve speed, could allow express Metroliners to make the trip much faster.

Making scheduled stops Monday, the X-2000 arrived 11 minutes early in New York at 2:44 p.m., largely because it has better acceleration and braking capability than normal Metroliner equipment and because it does not have to slow for most curves between Philadelphia and New York.

Iraq Reportedly Shuts Down Air-Defense Radar

The Washington Post


A senior Iraqi official said Monday that all Iraq's surveillance radar has been ordered shut down following a series of attacks on radar-guided missile sites by U.S. aircraft patrolling "no-fly zones" in the south and north of the country.

The official said Iraq would have preferred to preserve the advantage of monitoring its skies for overflights, not only by the allies but by Turkey and Iran as well, but was eager to preserve a cease-fire declared by President Saddam Hussein's government Jan. 20.

The explanation, from an official who asked not to be named, provided the first insight into a puzzling Iraqi strategy at the time: declaring a cease-fire while at the same time using its air defense network in a way that drew U.S. bomb and missile attacks. It appeared designed as a conciliatory gesture toward the new Clinton administration, one of several overtures in recent weeks.

U.S. military officials said during the confrontations that, except for one incident Jan. 24, U.S. warplanes bombed the Iraqi missile and radar installations only after detecting anti-aircraft fire or Iraqi radar that had illuminated U.S. aircraft in a way that could be interpreted as preparation for firing an antiaircraft missile. The Iraqi contention, however, was that only surveillance radar was being turned on to keep track of what was in Iraqi skies.

U.S. defense officials confirmed on Jan. 24 that Iraqi radar was not tracking a U.S. Navy jet when the pilot bombed a military site in southern Iraq the day before. The U.S. Navy A-6 jet bombed a site in a "no-fly zone" after the pilot saw flashes in the sky and thought he was being fired on by anti-aircraft guns. U.S. defense officials at first suggested that Iraqi search radar had tried to track the jet, but Iraq denied at the time that its air defenses had opened fire. It said its radars had been switched off and declared it remained committed to the cease-fire.

Earlier, from Jan. 10 to 21, U.S. warplanes and missiles, sometimes with the help of allies, had attacked Iraqi radar and antiaircraft sites and other targets on six days, including a barrage of 45 cruise missiles fired at an installation near Baghdad Jan. 17.

Saddam held a succession of meetings last week with officials and commanders of all of the country's air force and air defense units. Each unit was debriefed individually for details of what had happened before and after the cease-fire, which Saddam declared Jan. 19 as a goodwill measure to give the Clinton administration an opportunity to evaluate Baghdad's compliance with U.N. resolutions.

A high adviser refused to go into the details of the debriefings but indicated that for the next few months, Iraq will provide the U.S.-led allies no opportunity for a showdown.

According to unofficial Iraqi sources, all officers have been awarded 10,000 Iraqi dinars -- about $30,000 at the greatly inflated official exchange rate but worth far less in Iraq's present economy -- in an unpublicized gesture to keep them motivated and committed.