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Technology Stocks : Dell Technologies Inc.

DELL 133.78

-0.1%

Nov 14 9:30 AM EST

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To: Chuzzlewit who wrote (81182)	11/19/1998 11:39:00 AM
From: BGR	Read Replies (1) of 176387

CTC, You make it sound like the average Thai business was an aspiring LTCM in disguise. Export-import oriented businesses are always affected by currency rate fluctuations. If that makes them currency speculators then an extension of the same logic makes the average holder of credit cards charging LIBOR + fixed rate a speculator in interest rates. I posit that a more likely scenario is that just as most people do not read the fine print for credit terms and conditions carefully (or do not understand that anyway) the average S.E. Asian company had no idea of the exchange rate fluctuation risks that they were assuming. They were tempted to buy market share with cheap money - which was irresponsible and foolish for which they deserve blame - but not that different from what companies all over the world do. The Govt. was obviously supporting the flow of cheap money. If you argue that to be crony capitalism, I would like to draw your attention to two recent issues of Time magazine examining how the average US taxpayer subsidizes huge corporations. As for the banking system - which should have estimated risk better - being a house of cards, remember the plight of the S&Ls in the 80's when interest rates went up? Remember UBS losing almost a billion from derivative trades last year? And LTCM is of course the classic example. Underestimation of risk is again an universal phenomenon among bankers. As for cronyism between the Govt., the banks and the businesses, do you think that a parallel may be drawn between that and the NY Fed, the group of 10 brokerage houses and LTCM? Many short-sellers do (many, as in many believe). Personally, I salute the Fed for what it did in the LTCM case for the cause of greater market - and social - stability and not fall for some idealistic free market dogma. -Apratim.

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