Rubin Rigs, Roils Wall Street Markets

• Government bigwigs are working together to keep the stock market from ever falling too quickly. What they are doing is illegal.

While Washington politicians bask in the glow of a spectacular stock exchange boom, few voters realize the financial markets are at an all time high because they are being secretly, artificially -- and criminally -- propped up by the Clinton administration.

But major institutional investors, fund managers, bankers and stock speculators know Treasury Secretary Robert E. Rubin has quietly assembled an emergency team of economic and fiscal officials whose job is to prevent another stock plunge by means of "direct intervention : in the ups and downs of the securities trade, The SPOTLIGHT has learned.

Known as the Working Group on Financial Markets, the committee is chaired by Rubin, a billionaire investment banker.

The roster of its members, obtained by this populist newspaper from knowledgeable Wall Street sources, is led by four principals; Alan Greenspan, chairman of the Federal Reserve; Arthur Levitt Jr., Chairman of the Securities and Exchange Commission (SEC); Brooksley Born, chairman of the Commodity Futures Trading Commission (CFTC); and Under Secretary of the Treasury Lawrence Summers.

Each of the federal agencies represented by these four officials has been tasked with developing a contingency plan for government intervention in case of a stock market collapse, confirmed Dr. Aldo Milinkovich, a former Treasury economist who now heads the New York office of a national credit-rating firm.

"It's known as the 'Red Book' because this classified document is bound in red," Milinkovich said. "It contains ling lists of emergency phone numbers for just about every command-echelon administration official and Wall Street executive."

EVERYONE HAS A JOB

The Red Book outlines what each federal agency must do to slow and halt a sudden sharp drop in any of the major securities exchanges.

"The Fed is responsible for pumping unlimited cash reserves into the payments system," explained Milinkovich. "The SEC and CFTC will monitor and, if needed, steer the way market-making stock traders use the Fed's money to halt panic selling and begin buying selected equities until they break the free-fall of sharp prices."

At the Treasury, Rubin and summers will act as "emergency coordinators," ready to lend legal authority to what would otherwise be called criminal market manipulation, these sources noted.

The official rationale for this unprecedented federal annexation of the securities exchanges is said to be that government must protect the economy from runaway speculation.

"In reality, letting institutional investors and other major money managers know that the administration stands ready to bail them out of any sudden slup has encouraged speculation, rather than curb it," says Terence Costain, a veteran Wall street Securities trader.

Stocks have soared to record highs because major players know that the markets are now in the "too-big-to-fail" category of institutions insured by a deep cash pool: the money of U.S. taxpayers.

Politically, the Clinton administration's strategy of market supports is even more transparent. It has generated billions in quick profits for some of the Democratic Party's largest contributors, and it has persuaded people that the economy is on a roll.

On a roll, perhaps, but more importantly te souped-up and manipulated Clinton economy is plainly on a collision course, warn some of Wall Street's most respected market-watchers.

For a clear view, Clinton-era prosperity "should be seen as an airplane, up in the air, with plenty of gas but no landing gear," says Dr. Stephen Leeb, the noted economist, author and editor of Personal Finance magazine.

For the time being, the markets are soaring. "As long as we can keep them aloft, keep gas in the tank, we'll be all right," Leeb said "But heaven forbid if we ever have to land."

And since all flights must end sooner or later, the public better prepare for a crash landing, he warned.

"For almost a century, people regarded their homes as their largest single investment," Leeb related. "But between 1996 and '97 stocks and bonds replaced the family home as the most important asset owned by Americans. And that will make the next market downturn -- no amount of government meddling can stave it off forever -- a nation -- wide crackup of catastrophic proportions."