Market Now Down -160 points, Nasdaq -35.
Patroller, I'm not really an economist or any kind of
expert on the financial sector, and how various items
are interlinked...nor do I have that kind of time, so
all I'm going to say is that you have to be aware of
the law of unintended consequences, where cause and
effect are never clearly apparent, and chaos theory...
the classic example there of a butterfly fluttering
it's wings in South America causing changes in weather
patterns in New York City.
It's not much of an answer, so at the risk of sounding
foolish, I'll go on a bit more. My take is that Japan
and China (mainland) are the lynchpins regarding stemming
the Asian economic crisis. With the situation among the
SE Tigers continuing to deteriorate, it is of even greater
importance that Japan/China resist being dragged down.
The whole region is on the knifeblade of a full blown
depression, and if Japan stumbles further, especially it's
banking sector, the pressure on China will be more than
it is capable of dealing with, which would lead it to
devalue it's currency, triggering a subsequent secondary
chain reaction of currency devaluation, and a further
falloff in Asian demand for goods & services, and deepens
both the extent and length of time needed for the entire
region to export/produce their way out of economic recession.
The reason I follow the commodities markets, which I
alluded to in a long ago post, and link them to the stock
market/ECM, is that if demand for RAW goods dramatically
falls, which is reflected in the continued drop in price
in everything from oil, to copper, to wheat, etc, - which
reflect the needs and economic demands of the world economy
on its most basic level, I have to believe that demand for
FINISHED goods, will eventually/is falling in likewise fashion.
Since ECM companies produce finished manufacturing
technology goods, it is only logical that they too would
see a general falloff in demand.
Hope this helps, and is somewhat coherent and logical.
Good luck to all. Peter.
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