The securities markets have had a tough time of it lately with the Dow Jones industrial average crashing 4 1/4% in a week and the municipal market facing enough bad news to cause the delay of $3.3 billion of bond sales.

If the Dow keeps falling at its present rate, it will hit zero by next May, but that is unlikely, at least as far as the usual Wall Street analysts can see.

Yields on short-term Tresury securities have dropped to their lowest levels in 14 years, and with stocks down and yields so thin, the dollar has suffered in foreign exchange markets.

In Washington, President Bush's domestic policy is reported to be in disarray, plagued by flip-flops, and in a shambles, according to The Wall Street Journal, and lacking a core philosophy or any sign of a long-term agenda, according to The New York Times.

The economic news continues somber, dreary, and without cheer. New claims for unemployment benefits increased in early November to the highest level in seven months. The trade deficit widened slightly in September.

To stir business, President Bush's advisers discussed making Individual Retirement Account withdrawals easier, but they didn't explain where you'd get the money later if you spent it now. Congress passed bills to give the bank-deposit insurance fund $70 billion of new borrowing authority, another reminder of how badly bank deregulation was mangled.

In the municipal bond market, the weak economy and modern-day insistence on disclosure created provocative pressures. New York State announced it would incur a budget deficit of at least $3.6 billion for the fiscal year ending March 31, 1993, a gap twice as big as the $1.8 billion it estimated only four months ago.

When the news came out, New York City postponed for a day a $1.21 billion bond sale, and its investment bankers then raised yields on the bonds 20 basis points to keep investors interested and calm, a maneuver that proved effective. So the state disclosed its growing budget deficit, and the city will pay $2.4 million more a year in interest costs, a result that makes you wonder about regulation, the workings of markets, and the wisest use of money.

Investment bankers also saw underwriting profits evaporate in a $425 million offering of Metropolitan Transportation Authority bonds priced prior to and offered after the disclosure of the bigger state budget deficit. Disclosure and troubled economic times, coupled with narrow underwriting spreads, make winning profits in this game more dicey than it used to be.

There you have it. A slice of the real world of late 1991: complex, difficult, frightening, amusing.

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