Corporations Surveyed On Recession Risk, Hedge Fund Usage.

BETHESDA, Md.--(BUSINESS WIRE)--Nov. 2, 1998--More than a third (33.9 percent) of the corporate financial officers responding to an October survey conducted by the Treasury Management Association (TMA) here said they see a 50 percent or higher chance that there will be a recession in the United States in the next 12 to 18 months. Another 16.9 percent indicated they felt there was at least a 40 percent chance of recession.

An overwhelming majority (84.1 percent) said they anticipate decreases in interest rates in the next six months, but 78.2 percent also see further deterioration in capital market liquidity and credit availability.

There is a strong feeling that the interest rate reduction on October 15th did not go far enough. "The message these treasury and financial executives seem to be sending is that the Fed has not yet taken sufficient steps to deal with the current economic turmoil," said TMA chairman Patrick Montgomery. "The fact that 48 percent said they feel interest rates should be lowered at least another quarter percent by December 31, 1998 indicates a sense of urgency." Before the 25 basis point reduction on October 15th, 92.1 percent of the respondents said they wanted a decrease of at least that amount.

In another indication of the perceived need for further government action, 53.9 percent of the respondents said they favored regulatory or legislative restrictions on financial institutions' ability to lend to hedge funds. Ninety-three percent said the managers of their own pension funds were not authorized to invest in hedge funds. "It's a little surprising to see these people favoring increased government involvement," Montgomery observed.

The TMA survey was faxed to 3191 senior financial executives in early October. A total of 445 (14 percent) responses were received.

The Treasury Management Association supports treasury and financial executives through original research, continuing education, professional certification, publications, development of industry standards and government relations. The TMA has more than 12,000 members, representing some 4,000 companies. Three quarters of TMA members' companies have more than $250 million in annual revenues, with a plurality in the billion-dollar plus category. -0-

Capital Markets Survey Responses

1.   Given the turmoil in world-wide capital markets and recent events
     surrounding the financial bailout of Long Term Capital Management
     L.P. organized by the Federal Reserve, what do you see happening
     to:

              Number    Significant Moderate None Moderate Significant
            respondents  decrease   decrease      increase   increase

A. liquidity
   in the
   capital
   markets
   over the
   next six
   months?      442        16.7%    61.5%    6.8%    13.8%     1.1%

B. interest
   rates over
   the next
   six months?  442         8.1%    76.0%    7.0%     8.4%     0.5%

C. credit
   availability
   over the
   next six
   months?      442        18.8%    58.4%   10.9%    11.1%     0.9%


2.   What do you forecast the interest rate will be six months from
     now on:

                        No. responses   Mean     Median     Mode

     90-day Treasury Bills   386        3.95%     3.99%     4.00%
     30-year Treasury Bonds  400        4.87%     4.85%     5.00%

3.   In your view, what is the likelihood of a U.S. recession in the
     next 12 to 18 months? Use a scale of 0% for no chance
     what-so-ever to 100% for an absolute certainty.

     Total responses = 439; mean = 44.9%; median = 45.0%;
     mode = 50.0%; range: 0 - 100%

     breakdown of responses (cumulative percent in parentheses)

91 - 100% 1.6%  (1.6%) 51 - 60%  10.0% (33.9%) 11 - 20% 13.2%  (94.5%)
81 - 90%  1.4%  (3.0%) 41 - 50%  16.9% (50.8%)  1 - 10%  4.4%  (98.9%)
71 - 80% 13.2% (16.2%) 31 - 40%  10.2% (61.0%)       0%  1.1%   (100%)
61 - 70%  7.7% (23.9%) 21 - 30%  20.3% (81.3%)

4.   By how many more basis points should the Fed lower interest rates
     by this year's end? (442 responses)(Note 1)

     40.3%   25 points       5.0%   50 points       2.7%   75 points

5.   Is the manager of your pension fund authorized to invest in hedge
     funds? (313 responses)

                        Yes 7.0%         No 93.0%

6.   Should financial institutions be restricted by regulation and/or
     legislation in the amounts they can lend to hedge funds? (445
     responses)

     Yes     53.9%           No   35.1%            Don't know   11.0%

Note 1: Survey responses were adjusted to reflect the 25 basis point reduction announced October 15.