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Strategies & Market Trends : Asia Forum

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To: Jack Clarke who wrote (179)	12/28/1997 6:07:00 PM
From: Rational	Read Replies (1) of 9980

Jack: Under the veneer of your reasonable description of the state of malaise is a very important point: The American (net) spending as opposed to the Asian (net) saving habit. American consumers have borrowed heavily due to cheap credit and easy lending guidelines (125% LTV home equity loans). Like the Korean chaebols got easy credit to "invest," American consumers are at the peak of their leverage (ever) that is priming the American miracle currently. A turning point as I see (exclude Japan here): Asian assets become dirt cheap and the governments adopt as liberal policies as in S Korea. Then, the Asian hoarders will sell their US holdings (Treasuries and stock), US$ interest rate will rise and stock prices will fall. Sankar

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