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Technology Stocks : Dell Technologies Inc.
DELL 129.98-6.2%Dec 12 9:30 AM EST
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To: Jim Patterson who wrote (47828)6/16/1998 12:28:00 PM
From: Chuzzlewit  Read Replies (2) of 176387
 
Jim, congratulations of the newest Patterson!

Now back to business. You said As [Asian] currencies collapse, and companies flood markets with goods trying desperately to boost revenue and earnings, pricing will continue to implode for most good in most countries.

Sorry, but your premise is not accurate. The collapse of the banking systems through much of Asia has removed a major source of income from those businesses -- currency arbitrage. Now they will be forced to deal with the underlying economics within their respective industries. What does this mean? It means that they can no longer afford to sell at prices below cost because there is nothing left to prop up their profits. Falling local currencies argue that imported good will be more expensive. The things that will be cheaper are labor and locally produced components. But these companies will need to adjust their pricing to reflect their cost structures. Either that or they will cease to exist. It makes no economic sense to sell goods below the cost of manufacturing them over the long run. It is now a matter of survival for many of these firms, and they can no longer justify their pricing by claiming that they were capturing market share that will be profitable in the future.

TTFN,
CTC
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