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Technology Stocks : Dell Technologies Inc.

DELL 133.35

+0.1%

Nov 28 9:30 AM EST

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To: John Hauser who wrote (47333)	6/12/1998 3:24:00 PM
From: Chuzzlewit	Read Replies (1) of 176387

John, let's see if I can do it in simpler terms. The Japanese economy and much of the SE Asian economies look as if they are deteriorating further, so dollars come back to the US in a flight to safety (repatriation of funds). The question is where are those dollars going to go? Since corporate profits don't look so hot right now, this leaves the bond market. So we really had two things going on. Cash flow into the bond market from Asia, and cash flow out of US securities. Geoff also argued that this scenario is consistent with an increasing USD vs. the yen because of lack of inflation fears. If nothing else, cheaper goods from Asia help to combat domestic inflation. So the result of these shifts is a stronger dollar, weaker yen, increasing bond prices (decreasing rates) and a drop in the stock market. Eventually, you expect that the stock market and the bond market will behave in a more traditional form. Increasing bond prices will move together with increasing equity prices. TTFN, CTC

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