2 - The Michigan Daily - Wednesday, February 25, 1998 N A Inflation is zero, yet Gree asian 'storm clouds' are ai TION/WORLD nspan says AROUND THE NATION t. , Y WASHINGTON (AP) - Inflation is zero and the economy is still humming. But Federal Reserve Chair Alan Greenspan warned Congress that "storm clouds" out of Asia make the future highly uncertain. While describing the economy's current combi- nation of low inflation and high job growth as an "exemplary performance," Greenspan said yester- -day that the Asian crisis was forcing the Fed to navigate in uncharted waters with large doubts about how events will unfold. "The key question going forward is whether the restraint building from the turmoil in Asia will be sufficient to check inflationary tendencies that might otherwise result from the strength of domestic spending and tightening labor "" markets," Greenspan told a House Banking subcommittee. deliaeree If the Asian currency crisis depresses the U.S. economy ddle-oa more than currently expected, the Fed might have to cut testimoi interest rates, Greenspan said. But if U.S. demand remains strong and inflationary pres- Sures start bubbling up, then the central bank will be pre- pared to raise rates, he said. Many economists said Greenspan's comments yesterday in delivering his semi-annual monetary report to Congress supported their belief that the Fed is going to remain on hold through the first half of this year at least. "Greenspan went out of his way to strike a bal- ance between the threats facing the economy," Said David Jones, chief economist at Aubrey G. Lanston & Co. in New York. "He implied strong- ly that he will be keeping ,policy unchanged for some time to come." Financial markets, where some optimists had been pushing the notion that Asian worries would force the Fed to cut rates soon, sagged on Greenspan's remarks. Demand for the 30-year Treasury bond fell, pushing the yield up to 5.95 percent, and the Dow Jones industrial average ended the day down 40 points, at 8,370. "Greenspan delivered a very evenhanded, mid- dle-of-the-road testimony," said Allen Sinai, chief global economist at Primark Decision Economics. "What we' learned here is that the Fed doesn't know a lot about Asia and its effects at the present time." 7span d a very ... ff-te -road I " " - Allen Sinai Economist While expressing high uncertainty about the exact fallout from Asia, Greenspan delivered an upbeat assess- ment of current conditions, noting that the lowest unem- ployment levels in nearly three decades were coexist- ing with falling inflation rates. The Labor Department reported yesterday that infla- tion disappeared in January with consumer prices not ris- pproaching a 10-year high of 3.8 percent in 1996 to a more sustainable pace of around 2 percent to 2.75 per- cent this year. It also expected inflation to remain low, with consumer prices rising by 1.7 percent to 2.25 percent, little changed from 1997's increase of 1.7 percent. Greenspan, however, stressed that the econo- my's actual performance this year will depend on how much the Asian currency turmoil cuts demand for American exports to the region while boosting U.S. demand for cheaper Asian prod- ucts. "The outlook for total spending on goods and services produced in the United States is less assured of late because of storm clouds massing over the Western Pacific and headed our way," Greenspan said. While Republicans generally praised the Fed's handling of the economy, a number of Democrats worried the Fed will be more quick to fight infla- tionary pressures by raising interest rates than it will be to ward off a recession by cutting rates. "It is time now to start talking about a pre-emp- tive strike against recession and against disinfla- tion," Rep. Barney Frank (D-Mass.) told Greenspan. Greenspan insisted the central bank is poised to move in either direction but the worst thing the Fed could do would be to act too quickly to fight inflation or a recession, only to learn later that the real threat came from the opposite direction. The Fed last changed interest rates in March 1997, when the central bank nudged its federal funds rate - the interest banks charge each other - up a quarter point to 5.5 percent. While many economists then believed that would be the first of many Fed rate hikes, the cen- tral bank left policy alone the rest of the year, largely because inflationary pressures decreased. Rescuers search Florida tornado debris KISSIMMEE, Fla. - Rescuers with dogs searched the piney woods near a tor- nado-devastated campground yesterday for the bodies of people blown away when a swarm of tornadoes swept across central Florida. At least 38 people were killed and hundreds of homes and businesses were destroyed Monday. Seven people were still missing yesterday, four from t Ponderosa Park Campground. As hope of finding more survivors faded, searchers began yelling to the two dogs, "Go find Fred!"-the signal for the black Labrador and Weimaraner to find bodies hidden in the underbrush surrounding the campground. "Search!" - the command to find survivors - could no longer be heard. "There's nothing in there," said Lt. Mark Bogush of the Tampa Fire-Rescue Canine Unit. "They don't want to shut that door of hope, but this is basically a cleanup" Rescuers picked through the mass of twisted metal, shattered glass and splin- tered lumber the day after six to 10 El Nino-driven twisters tore through central Florida from the Gulf of Mexico. Monday's tornadoes, packing 260 mph winds, were the state's deadliest on reco killing more people than Hurricane Andrew in 1992. The weather service issue warnings 20 to 30 minutes before the tornadoes hit, but warnings did little good. ing at all, helped out by the biggest plunge in energy prices in seven years. In a second report, the Conference Board said consumer confidence surged to a 30-year high this month, reflecting satisfaction with the econo- my's performance. As part of Greenspan's report to Congress, the Fed updated its economic outlook. The new ver- sion tracks closely the expectations of the Clinton administration and many private economists. The Fed projected that growth would slow from U.S. students trail rest of the world WASHINGTON - High school seniors in the United States scored below students from most other coun- tries in an international test of math and science, according to results released yesterday. Even those Americans who took tough physics and advanced math courses per- formed worse than most students taking equally rigorous courses elsewhere, according to the Third International Mathematics and Science Study. Although students from 21 countries took the test of general math and sci- ence knowledge toward the end of the 1994-1995 school year, Americans scored below the international average. They outperformed only students from Cyprus and South Africa. Asian countries did not participate in the 12th-grade study. A comparison of the high school elite - those who took physics and advanced mathematics - showed Americans close to the bottom of the 16 nations where those comparisons were made. "Americans have comforted them- selves when confronted with bad news about their educational system by believ- ing that our better students can compare with similar students in any country i' the world," said William Schmidt, a pn fessor at Michigan State University. Men arrested for trafficking organs NEW YORK - Human rights activists said yesterday that a thriv- ing black market in body parts for transplantation has been illuminated by the arrests of two men o charges of trying to illegally se organs from executed Chinese pyis- oners. The two men, Cheng Yong Wang - who told undercover investigators he had been a prosecutor on Hainan Island in China - and Xingqi Fu - Chinese citizen living in New York - were seized after meeting with an FBI agent posing as a medical execu- tive. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - All Clothing 50% off! March 3.4.5.6.7 5 days only, Tue-Sat Open Tue-Fri 11-7 Sat 10-5 Sun 11-5 Closed Mondays Ann Arbor PTO Thrift Shop One mile south of The Michigan Union 1621 S. State (inside Bargain Books) * 996-9155 IRAQ Continued from Page 1. day, Hans Corell, the U.N. legal counsel, estimated that there are about 1,500 buildings within the presidential sites. Other senior U.N. officials put the num- ber at "just over 1,000," but the U.S. offi- cial said that despite an inspection last week by U.N. cartographers, the U.S. still has not heard a coherent estimate of how many buildings there are in these compounds that would fall under the jurisdiction of the Special Group. Annan has said he believes he can work out any differences over the role of UNSCOM through personal discussion with Richard Butler, the Australian diplo- mat who is UNSCOM's chair. But U.N. sources said that Annan's sympathetic responses to Iraqi complaints about UNSCOM inspectors allegedly being disrespectful of Iraq's sovereignty, digni- ty and national security have caused anger and resentment within UNSCOM. Pursuing a theme he first sounded in Baghdad, Annan told a news conference yesterday that UNSCOM staff members "have to handle Iraq and the Iraqis with a certain respect and dignity and not push our weight around and cause ten- sions." The sources said that during the closed meeting with the ambassadors of the 15 Security Council countries, he went further, saying some UNSCOM staffers were "cowboys" who some- times had behaved irresponsibly while pursuing their duties within Iraq. I AROUND THE WORLD ,- _ , ; /.' PRESENTING A CONFERENCE ON WOMEN'S ISSUES: Kim Dae-Jung takes helm in S. Korea SEOUL - Kim Dae-jung, one of the 20th Century's most resolute crusaders for democracy, was sworn in as president this morning in a ceremony that com- pleted the first transfer of power from a ruling party to the opposition in modern South Korean history. At an outdoor inaugural jubilee attended by more than 40,000 people, Kim, a man who has been persecuted, jailed, exiled and hounded for decades as an enemy of the state, called for reconciliation with South Korea's authoritarian past and a tough national effort to overcome the disastrous eco- nomic straits into which the nation has lately fallen. "We are standing at a crossroad from where we can march forward or retreat," Kim said. "Let us open a new age during which we will overcome the national cri- sis and make a new leap forward." Kim also declared that he intends to bring to a gradual end the "shame" of the divided Korean Peninsula through a cooperative reunification with rival North Korea, and he said he would push for immediate improvement in communications with the Communist north. "It's a miraculous day," Han said of weather. "Maybe God thinks he will be great president." "I thought this day would never come," said former U.S. ambassador James Laney. Israeli secret police chief resigns JERUSALEM - The chief Israel's renowned Mossad intelligence service resigned yesterday under intense pressure here and abroad for his role in a bungled assassination attempt in Jordan last fall. Danny Yatom submitted his reoig- nation one week after a govern ment commission blamed him and other key Mossad officers for botching an operation to kill Khaled Meshal, a leader of the militant Islamic groi Hamas, in Amman, the Jordani capital. - Compiled from Daily wire reports. Anthropology in Bordeaux a Jewish History in Prague Economics in Warsaw International Relations in Seoul Traditional Medicine in Pune " Cinema in Cannes Art History in Florence a Theatre in London, and much more in India, France, Korea, Spain, Czech Republic, England, Italy, Germany and Poland Some internships Two to ten weeks Early May to late August Penn Summer Abroad n University of Pennsylvania College of General Studies 3440 Market Street, Suite 100, Philadelphia, PA 1 9 1 04-3335 email: sdanti@sas.upenn.edu a phone: (215)898-5738 Friday, March 13 - Sunday, March 15 Michigan League 4 . 4 P * For more information, you can: * see our web page at http://www.umich.edu/-artemisil * call 763-4652 * stop by the Michigan League rogramming Office, 911 N. University HOUSE T=CHIno -JunrL= d:rum n ass:::5E SPONSORED B: OOCLrIG The Michigan Daily (ISSN 0745-967) is published Monday through Friday during the fall and winter terms by students at the University of Michigan. 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