Today's Papers

Free Falling out of Grace

The Los Angeles Times, the New York Times, and the Washington Post each lead with the stock market free fall. Increasingly wary of an overvalued market, investors aggressively sold off stocks, causing the Dow to plummet 616 points and the Nasdaq to drop 355–their largest point losses ever. All three papers off-lead Russia’s ratification of the START II nuclear arms reduction treaty. Only the WP and the LAT front the Elián González situation; the NYT puts it inside with the national news.

Analysts scrambled to account for the market’s drastic plunge, to assess the damage, and to predict the long-term consequences. The fall stemmed primarily from the Labor Department’s report of a larger than expected increase in the consumer price index–an increase that will most likely drive interest rates up. Investors responded to the report by selling off overvalued technology stocks. The drop in the technology sector gave rise to anxiety about the health of the market on the whole, resulting in deep losses for industries across the board. The WP suggests that the CPI figure is artificially high (in part due to the recent rise in energy costs) and that it doesn’t necessarily augur the approach of high inflation. The NYT inserts a few optimistic asides in its otherwise grim reporting: The market’s decline might give the Fed the economic slowdown it has been hoping for since last summer; the Treasury and bond markets have benefited from the recent sell-off; and though investors dumped many individual stocks, they continue to pour money into mutual funds. The LAT (the only one of the three papers to use the word “panic” in its primary coverage of the plunge) notes that the recent downturn is especially troubling because much of the money that has flowed into the market in the past few years has been borrowed. That is, many investors borrowed money from brokerages to buy stock, and now that Friday’s collapse has wiped out their collateral, they’ll be in a bind to repay their loans.

The WP and the LAT report that Russian legislators easily passed the START II treaty (ratified by the U.S. Senate in 1996), which will reduce U.S. and Russian nuclear arsenals by nearly half. Communist hard-liners held up the treaty in the past, but the new centrist majority in the Russian parliament paved the way for approval. The signed treaty makes possible discussion of further arms reductions. Putin warned, however, that Russia would withdraw from START II if the U.S. proceeds with plans to build a national missile defense system. The NYT and the LAT note that because of economic pressures and the costly war in Chechnya, Russia would have had drastically to reduce its nuclear stores whether it passed START II or not.

The NYT fronts developments in the case of Wen Ho Lee, the Los Alamos scientist indicted for espionage. The files that Lee downloaded onto his computer were given higher security classifications only after charges of espionage had been brought against him. The government stands by its charge that Lee’s actions compromised national security; the defense, on the other hand, believes that the findings about the shifting security classifications will greatly benefit its case.

In the absence of major developments in Miami, the WP and the LAT front pieces that examine the secondary elements of the Elián González situation. The LAT looks at the reaction of the Latino population outside of Miami, noting growing resentment of the Cuban exile community’s political clout. The WP runs a piece on Juan Miguel González, who has become frustrated with the U.S. government’s inability to reunite him with his son. Inside, in its national section, the NYT reports that the Justice Department has asked an Atlanta appeals court to clear the way for Elián to be returned to his father, and also that Janet Reno has resolved to seize the child forcibly from his Miami relatives if need be.

The WP fronts a piece on Russia’s diminishing enthusiasm for the war in Chechnya. Newspapers no longer predict the imminent withdrawal of Russian troops but question why so large and so powerful a country has been mired so long in a conflict with such a small group of extremists.

The LAT reefers a story that the Defense Department has determined that it does not have grounds to pursue a misconduct investigation of Lt. Gen. Claudia Kennedy, who recently accused a fellow general of sexual harassment. An unidentified retired officer had sent an e-mail to the Defense Department’s inspector general charging Kennedy with “personal misconduct.”

The WP fronts a report that D.C. is bracing itself for the anticipated protests against the World Bank and the International Monetary Fund, which are holding their spring meetings in the District this weekend. The NYT fronts a story that says Ralph Nader plans to use the protests as a springboard for his presidential campaign, which he’ll run on the Green Party ticket.

The LAT fronts a story on an ex-Internet executive’s indictment on charges of embezzlement. Michael Adam Fenne (real name David Kim Stanley) is being held in Virginia for bilking investors out of hundreds of thousands of dollars. Stanley seems to have preyed on venture capitalists so anxious to ride the dot-com wave that they neglected to investigate that which they were investing in. The story reads like an allegory of Friday’s market collapse.