<OT>Hi R Stevens, You pose and interesting question, so I'll give you my view...right, wrong or otherwise just my thoughts...
What I have noticed in general is that the main part of Oct 97 crash came the morning after the last big Asia melt down... and the US and European markets tend to generally follow what has been happening in the Asian arena since then.
If we look for some of the reasons as to why this may be occuring the following seems to come to light. Currency values in this area have devalued greatly in the last 12 months, thus making it more difficult for their population to buy items that they want and need due to inflation.
The accounting, investment, government subsities and banking practices
are far different than those of other regions. This is now becoming evident in the numerous loan failures and companies that the governments are deeming not viable.
This whole area was one giant emerging market growing at a frantic pace that got caught up in their own poor financial principles, almost like a pyramid scheme. In a world market economy, one cannot subsidise companies that are not profitable. Many of these countries have been doing just that for years.
The ripple effect is what we have seen in the last 12 months. The effect on the US market is in part due to the fact that he companies that make up our market are very much affected by the events in the Pacific Rim. Our market is very news driven, and one of the economic balancing factors seems to be the world markets.
News of a major melt down in Asia seems to worry stockholders in Europe thus they go down, and by the time the DOW opens you see news from Ruetors that the DOW looks to open lower due to Asia and Europe being down. It seems to be mostly news driven with the worry that it will effect the US economy, which it may well and has to a point.
Yes, I would agree that the TAIL is wagging this DOG.
Sorry to ramble on so...
Back to screening
Later
Preston |
