Mike, I do not read the Honk Kong thread (I read too many already, and I do have other things to do (VBG)). As for the potential of China devaluing, it is not out of the question. I think that the yen will have to go to 160 yen/dollar for that, and if that happens it will not be soon, IMHO.
But read the following:
biz.yahoo.com
First, now they tell us? I posted an analysis of the liquidity problem the big bang will cause within a week that they announced it. Furthermore, this guy is out of his skull if he think that 1 trillion bucks are going to flow out of japan within a year. This is one third roughly of Japan GDP. I think that my estimate of a leak of $200 billions per year is a big enough injection of liquidity to arrest Armagedon around these parts.
I think that we are coming to a watershed in the Asian market, a catharsis which will serve as a foundation for a rally there (as well as here, thus my forecast of a bottom within a week of next Wednesday). The nikkei is close to breaching the year's low, and when that happens their will be a rush, maybe a 1000 point to 2000 points drop within a week and then a (temporary) reversal.
I also think that the $100 billion or so stimulus will eventually have a positive impact on their economy. It is barely enough however to stop the decline in GDP, and not enough to soak overcapacity from the rest of the rim, but at least it might rebuild some degree of confidence. Getting too bearish right now (after the expected catharsis) might be dangerous.
Zeev |
