Hi Sankar,
<This is not a very meaningful statement because when a company loses all its equity, it is pennies worth and if some Americans are willing to run the baggage for pennies, they will be most welcome. I do not think Americans or others are stupid to buy such companies even for pennies. For companies that are worth a lot, there will be competition to acquire. On average, the acquirer gets -.4% and the acquired
receives 20%!>
Actually, I was thinking more along the lines of companies being broken up and real assets being liquidated at fire sale prices.
mktnews.nasdaq.com\www\nasdaq\news\RN\1997\12\24\Re17693T1701.html&usymbol=9999
<This is a wishful thinking, IMO.>
check out the last 2 paragraphs
mktnews.nasdaq.com\www\nasdaq\news\RN\1997\12\23\Re15537T1615.html&usymbol=9999
<This is a wishful thinking because even when the British, who colonized various parts of the world, could not achieve this goal. The British robbed as much as they could like the diamonds from India, but could not control the banking/monetary system. [This is no offense to the gentle British society. It just refers to those explorers who happened to be British.] Even within the US, different states (especially southern states like Texas) have succeeded remarkably to control their own regional banking system. The US has taken so long to pass an inter-state banking law in 1996!!>
I can't find the article I was looking for but it basically said that since the "crisis" the US now owns a majority of the banking and insurance industry in over 60 countries.
The Mexican "crisis" and subsequent IMF bail out didn't seem to hurt US profits. How many US cars are made in Mexico now? How many "Assembled in Mexico" labels do you see on products these days compared to a few years ago? Who gets the profit?
I've seen a lot of wild eyed panic, driven by sensationalist media fluff, but so far I haven't seen a single shread of evidence that suggests that US earnings will be hurt by Asia. On the contrary the only things I can dig up that resemble something other than "opinion" suggest the opposite. I've been searching day and night looking for hard proof. The only thing I can find negative are comments by fund managers that were saying techs were over valued and too pricey to invest in last summer.
79% of the disk drive industry is controled by the US. Do you believe the over supply problem was caused by the other 21%? After US companies have been dumping record levels of inventory into the channel for the past year? Oracle? Give me a break! That was as lame an excuse for getting clobbered by Microsoft as I've ever heard!
Japan? From what I've read a lot of their companies that used to compete with the US are now bankrupt and US companies are buying up as much paper secured by real property as they can get their hands on. Japan may be able to export at a slight currency advantage from a year ago but their imports of raw materials and cost of foreign operations go out at an equal disadvantage.
If you want to see something really interesting check the NASDAQ index charts against the time of the NASDAQ "news" releases. Then count the number of times words like "panic" "crisis" "jitters" "growing concern" "shakey" "profit taking" are used against words like "calm" "confidence" "recovering" "optimistic" "rebound" etc.
I may be wrong, but I think they are building a bear trap of epic proportions.
A lot of money has changed hands in the last month. How was the "crisis" insitigated? Who profits from the changed conditions? What's the next step? As close as I can tell the attack started against China. When that attempt failed it shifted to Japan with somewhat limited success, then to Korea, Maylasia and the Phillipines for a near total destruction of their economic systems. An attack of this magnitude had to have been planned well in advance and carefully coordinated, the effects on other economies calculated to the last dime as well as what spin to put on it for maximum profits.
I don't believe my thinking is as wishful as you suggest. I do tend to assign a BS rating to the printed material I read based on the facts presented, the reliability of the source, and the slant of the emotional wording used. For example, I saw one article on the NASDAQ site that basically said: "A brokerage firm had a disapointing quarter. Said it was because of Asia. The techs are in trouble." Certainly a sound, reasonable arguement to sell off DELL, INTC and IMB. Right? I give those a BS rating of 100%.
Regards,
Don |
