When I turned on the TV and saw Bill Clinton looking sombre and statesmanlike (and not wearing the tie that Monica is supposed to have given him) I assumed that the house of cards had come tumbling down and he'd been forced to resign. Wrong! He'd launched a missile attack on Afghanistan. Naturally. As a strike against terrorism. It was Bill the commander-in-chief not Bill the economical-with-truth who stared out from the TV screen.
I sighed to myself and wondered what effect that particular presidential activity would have on a market that is beginning to resemble a Hall of Mirrors. The dollar usually goes up when the US decides to bomb somewhere, but the dollar had been going up anyway, so this really wasn't anything new.
Boris Yeltsin (obviously smarting at the fact that Russia hadn't yet received any more IMF money to replace the $17.1 billion [£12.2 billion] it received in July and spent before it decided it couldn't afford to repay any more debt) denounced the US action as an act of terrorism, but he was a little less condemnatory later in the day. He had other things on his mind anyway - like the sacking of his cabinet.
The removal of Sergei Kiriyenko was a lot speedier than his installation last April when it took three sessions of voting to elect him as Russia's youngest (and probably shortest serving) prime minister. Following the Duma's failure to pass all of the measures required by the IMF and the subsequent devaluation of the rouble, Yeltsin needed someone to blame. Out went Kiriyenko - a whippersnapper at 36, and back came Victor Chernomyrdin - aged 60. Not quite as old as your average Japanese prime minister perhaps, but Russia's flirtation with youthful leaders had just come to an abrupt end. Yeltsin told the Russians that Chernomyrdin was "decent, honest and thorough". Heaven knows where that leaves poor old Sergei. However, Yeltsin seems to be focusing more on his successor for the presidential elections in 2000 than the current crisis since he feels that Chernomyrdin's decent, honest and thorough qualities will be decisive at that time.
Both Victor and Boris will have to last that long. The Duma wanted Yeltsin to resign on Friday but he was having none of it. Presumably Boris wants to hang around at least until September 1st when he's due to meet President Clinton who is scheduled to make an official visit to Russia. I'm sure they can have a nice, cordial chat over a couple of vodkas. Bill needs a holiday - I don't think you can count Martha's Vineyard somehow, I have a feeling that the atmosphere wasn't exactly conducive to that holiday feeling.
In the meantime, though, the nervousness that has beset Eastern European and Far East markets finally hit Latin America. Last Friday saw a bloodbath in emerging market debt and rumours that Venezuela was about to devalue were given much more credence than they would have been a few weeks ago. Cue the dumping of Venezuelan paper on the markets - or at least the attempted dumping - there weren't many buyers. The other worry was political - apparently people were concerned that a devaluation would help the presidential campaign of Hugo Chavez who led an unsuccessful coup in Venezuela and who recommends that they refuse to repay foreign debt. Not exactly the sort of stuff to make your average fund manager feel comfortable about Venezuelan bonds, so they joined the hit list of stuff you wish you'd never bought in the first place. (The Venezuelans had planned to sell some seven-year bonds this week - I think that's off the agenda now.)
The ensuing scramble to sell anything that even hinted at emerging market debt (or submerging market debt as one commentator puts it) has meant that emerging market funds have been absolutely savaged, with values down as much as 30 per cent this month alone.
Politicians who tried to make things better by saying things like "the situation is very serious" were only contributing to the massacre. They think they are talking to rational people, but at this stage in the game, rational just doesn't cut it. People don't want to be rational, they want to be solvent.
Although the Far East wasn't actually making headlines in all this, Asian debt continued to plummet, with Indonesian bonds now yielding anything up to 1,300 basis points more than US treasuries.
Naturally, when everything else was being sold, people were piling into what they knew was safe and US Treasuries and German Bunds were the main beneficiaries. It helps Bill Clinton's handlingof-the-economy rating, I guess, and doesn't do Helmut Kohl any harm as he pounds the pavements in the German election campaign. He's still behind in the polls, but the sight of frantic fund managers piling their cash into good old reliable bunds may yet help.
Last weekend, sick to death of anything to do with financial markets, I aimed for a cultural night in with a bottle of wine and the video recording I'd made of one of the BBC Proms nights. Remember my video? The new one? The one that thinks RTE is RTE and BBC is also RTE? My cultural night in consisted of the bottle of wine and some absolutely awful movie (no doubt one of RTE's special summer repeat straight-to-video imports) that I'd recorded by mistake. Actually, I didn't even watch it, it was so dreadful. But I was furious that I'd let my computer-whizz nephews disappear down to Waterford for the week without remembering that they could have reprogrammed the damned video first! What's the point in having children around the place if they can't programme the video for you?
I'm also in the throes of computer mayhem myself. A couple of glitches with the current Apple have necessitated some running repairs which - by now - hopefully have got it back in full metal jacket working order. But I really like the new iMac which I believe is flying off the shelves in the States. The problem with computers is that - despite all the ads telling you what good value they are - they're a bit like new cars. As soon as you buy one, they're almost worthless. I also need (need? I'd like, let's be honest) a new laptop. But laptops seem to be almost twice the price of desktops and I'm really not sure why.
Anyway the cute little iMac looks like becoming a fashion statement and I'm glad because Apple needs some kind of statement. Still, it seems to be working. The shares have bucked recent trends and actually, finally, magically, gone up! Sheila O'Flanagan is a fixed-income specialist at NCB Stockbrokers
