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October 12, 1994 - Image 7

Resource type:
The Michigan Daily, 1994-10-12

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The Michigan Daily - Wednesday, October 12,_1994 - 7


Savage to discuss money management

For the Daily
Many students have probably en-
countered the frustration of a money
machine that insists they are broke, a+
budget that refuses to balance or the
checking account that is always empty.,
Help is on the way. University alum I
Terry Savage will deliver the annual'
Mullin-Welch lecture tonight at 7:30 in
Hale Auditorium.
The lecture, sponsored by the Cen-
ter for the Education of Women, is
titled, "Making Money Work," and
deals with financial management for
success. Savage advised,"You have +
Read the Dail

control over your money."
Since graduating from the Univer-
sity in the mid- I960s with a degree in
American Studies, Savage has become
one of the nation's leading financial
advisers. She is the author of two best
selling books, "Terry Savage's New
Money Strategies for the '90s" and
"Terry Savage Talks Money: The Com-
mon-Sense Guide to Money Matters."
According to Savage, her studies at
the University helped prepare her for a
career in financial advising "because
money is American Studies."
Before the speech, Savage will be
offering a "class" she says is for "abso-

lutely any student who is ever going to
have to make a financial decision."
"Money 101: A Free Introduction
to What YOU need to Know About
Money and Finance" will be an infor-
mal workshop for students to ask Sav-
age about anything pertaining to fi-
nances. The workshop begins tonight
at 5 p.m. in West Quad's Welch Room.
Many students do not effectively
manage their money, Savage said,
and Money 101 is their time to get
help. She said this informal lecture is
her chance to "give the course I wish
had been offered when I was a stu-


Recycle the Daily.

Write the Daily.


........... .


Chelsea police officer Robin Wright makes phone calls from jail to raise bail after his partner had him locked up in
the March of Dimes Jail and Bail.


Nobel Prize awarded to 3
economists for game theory


Los Angeles Times
Three economists, two Americans
ndaGerman colleague, were awarded
eNobel Prize yesterday for their work
on a theory that explores human behav-
ior in settings ranging from a poker
game to the corporate suite in an in-
creasingly global marketplace.
The winners,- John C. Harsanyi
of the University of California, Berke-
ley, John F. Nash of Princeton Univer-
sity and Reinhard Selten of the Univer-
sity of Bonn - are scholars of game
Weory, which applies complex logic to
real-world scenarios of conflict and
competition. These include military
strategy, politics and sports in addition
to a broad range of business problems.
"Eventually it will give us a higher
standard of living because we make
better decisions," said Harsanyi, 74,
from his home in Berkeley, because the
theory can lead to "better economic
ecisionsby businessandgovernment."
Across the Atlantic Ocean,

- .. w

Hersanyi's former collaborator, Selten,
64, was almost apologetic about the
esoteric nature of his specialty. "I have
worked a long time in the field of
mathematical economic theory, and
everything to do with mathematics is
difficult to understand for many," he
told reporters.
A key to the theory is the notion that
if you can understand the strategies of
all your rivals, you gain insight into the
outcome of a situation and the potential
benefits, economists said Tuesday.
Unlike textbook economics that is
often divorced from the real world,
game theory assumes people get tangled
up in interactive situations that may be
filled with bluffs, second-guessing and
bold gambles. Complex scenarios are.
typically spewed out of a computer in
the language of mathematics.
In citing the winners, the Royal
Swedish Academy said they had em-
ployed strategies observed in games
like chess and poker to make predic-

tions about the interaction between
"Everyone knows that in these
games, players have to think ahead=-
devise a strategy based on expected
counter-moves from the other
player(s)," the judges said.
: At a Princeton University news
conference, Nash jbked that he wished
the $930,000 prize was bigger because
it had to be divided three ways. But
Nash, 66, said he was "thrilled to re-
ceive this high honor."
In the 1940s, military analysts wised
early game theory as a tool to help
guide U.S. ships in the perilousjourney
across the Atlantic Ocean. Later, itwas
incorporated into Cold War thinking,
such as in U.S. nuclear strategy against
the Soviet Union.
But scholars have always appreci-
ated the economic implications, which
seem well-suited to a world of far-
flung corporations and fierce economic

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answering questions on Marine Corps Officer Programs at the EECS Bldg. Atrium
on North Campus from 9:00 a.m..- 3:00 p.m. on October 12, 1994. If you are
interested please come by, or call 1-800-892-7318. Semper Fi!


Russian ruble drops 27 percent
following rush of panic trading

MOSCOW -- When the Russian
ruble crashed through the floorboards
yesterday, it landed on Polina Ivanova
like a ton of bricks.
And as it flattened the hopes of
Ivanova and countless other Russians,
the collapsing currency may have dealt
a severe shock to the fragile economic
and political stability this country has
enjoyed in recent months.
Ivanova's recent life story reads
'ike the fondest dreams of Russian re-
formers come true. The 48-year-old
woman from Magnitogorsk, a bleak
industrial city 900 miles east of Mos-
cow, quit her state-sector job two
months ago, borrowed a $2,100 stake
from a friend and headed for Turkey on
a cheap charter flight.
There, she invested the borrowed
oney in inexpensive clothing and foot-
ear, returned to Magnitogorsk and
sold the goods in a public market. Then
she got on a train and traveled to Mos-
cow to exchange the rubles she had
earned for dollars to repay the loan.
But when Ivanova arrived in the
capital yesterday, she found the bottom
had fallen out of the currency market.

The ruble, which was trading at 2,600
to the dollar only two weeks ago, lost
27 percent of its value in a rush of panic
trading on the Moscow Interbank Cur-
rency Exchange and closed at 3,926
yesterday. And at most of the private
exchange points around the city where
ordinary citizens trade currency, there
was simply no market for rubles at any
price. At the few where there was, the
price was exorbitant.
So Ivanova, the would-be entrepre-
neur, spent the day walking around the
city in despair clutching a totebag
stuffed with ruble banknotes.
"I can't do anything," the careworn
woman said with a weary shrug. "I'm
afraid to carry all this money around
with me. And I'm afraid to exchange it
at these rates because I'll take a terrible
loss. I just don't know what to do."
Ivanova's plight reflected one small
piece of the crisis atmosphere that
quickly descended on Moscow in the
wake of the ruble's collapse. As gov-
ernment ministers scrambled in and
out of emergency sessions, tried to
calm public fears and blamed the panic
on unidentified "speculators," econo-
mists offered gloomy assessments of

the impact of the crash.
"This could cause a total destabili-
zation of the financial system," said
Andrei Illarianov, a former economic
adviser to the government. "Over the
last nine months, neither the govern-
ment nor the Central Bank have: been
pursuing truly reformist policie;. The
collection of stupid mistakes was accu-
mulating. Now we see the results."
Illarianov and other critics say while
the government succeeded in lowering
the inflation rate and stabilizing the
ruble's value in the first eight months
of the year, ift did so not through true
structural reforms but through sopgap
measures such as postponing the pay-
ment of salaries and other obligations.
Inevitably, they say, goverrnment
spending began to rise again? in the
summer, triggering an increae in in-
flation in September and leading busi-
nesses to convert rubles to dollars as a
hedge against future inflation. That in
turn encouraged speculation against
the ruble; and when Russia'sI Central
Bank abruptly stopped interening in
the market - buying rubles --- to prop
up the currency's value late last week,
the bottom fell out.

i /F ;' "

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