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Strategies & Market Trends : HONG KONG
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To: Tom who wrote (2403)10/8/1998 2:05:00 PM
From: Ron Bower  Read Replies (2) of 2951
 
Tom,

IMO
$US weakness definitely good news HK/China. Yen strength bad news for Japan, but yen is still weak and may retreat.

HKMA is being vindicated. HSBC and HKT down but are good long term holdings even though HKMA having paper losses. Wonder what HKMA critics are saying now?

Those of us optimistic about HK/China also being somewhat vindicated, but the game is a long way from over. $HK and yuan are being devalued as everyone projected, just not the way they thought.

Hedge funds are collapsing. We've hit margin call levels and seeing a selloff to cover. Only the shorts in good shape.

I don't see the market action as an indicator of US economic weakness. The US markets had gotten over priced and corrected to a point where leveraged positions had to be covered. I don't know where the bottom is, but I don't feel we'll see a major catastrophy - perhaps 7000 or slightly lower on the DOW. The market should correct to a level equivalent to value once the margin covering is done as banks and investors will enter it more conservatively for a while.

The 'Free Market' advocates will say that we're seeing it in action even though it was Free Market that allowed the hedge funds to cause the huge swings and instability.

The International banks will still need to be bailed out so politicians will still be asking for IMF funding.

Cashed in some bond positions and placing limit orders. Good buying opportunity.

JMHO,
Ron
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