Something Wicked This Way Comes

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Wall Street looked jittery Thursday and world markets took a pounding after Alan Greenspan dampened expectations of coordinated global interest-rate cuts and the Commerce Department reported a falloff in U.S. exports. But there may be worse to come. Friday is a "triple-witching day," on which the computers that track equity contracts, index options and index futures contracts are all programmed to settle accounts in the last hour of trading. "Expect a wild afternoon on Wall Street," says TIME reporter Bernard Baumohl.

Investors waiting for a wink from Greenspan might do better to turn their attention to Tuesday's meeting between President Clinton and Japan's Prime Minister Obuchi -- a summit for which Japan has just provided a few grains of hope by finally starting Friday on the path toward banking reform. "A small drop in interest rates would have more psychological than economic impact," says Baumohl. "The world economy won't get back on its feet until Japan agrees to repair its banking system -- and a lot more still needs to be done." Combine Tokyo's paralysis with a cauldron of programmed trading trouble, and there may be some bad news for a President whose job-approval ratings have been predicated on a healthy economy.