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Strategies & Market Trends : Asia Forum
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To: Brad Bolen who wrote (5897)8/26/1998 2:48:00 PM
From: Paul Berliner  Read Replies (1) of 9980
 
I don't get all this stuff about 'wearing down the speculators' until only a few remain. The specs have been attacking the $HK for around a full year now (since the handover), and thus have also made quite a tidy sum shorting HSBC and other bellweathers since the handover. I don't think it would matter even if the HKMA continues buying for another month, driving the HS back to 10,000. The specs are still way on the plus side and have plenty of winnings left over to toy with the $HK. There's already talk about them rolling their positions over into forward contracts and the game will thus continue until the HKMA gives up, because the specs certainly won't. Everybody knows devaluation is imminent. They question now isn't 'will they' but 'when will they'.
Also, I don't see how HK would consider a complete dollarizing of the economy. And I doubt such an action would blow speculators out of the water anyway... you're talking about an enormous abrupt spike in the HS which can't happen because there's no volume and no buying interest. Sharply lower rates would only take the HS so high... not back to pre handover levels.
Lastly, thestreet.com, which has been considerably lacking on the currency view since derosa left, had an article today by DMGL currency
officianado Marc Chandler on Hanke, HK & C-boards.
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