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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Daskin who wrote (31197)	9/27/2000 1:32:51 AM
From: Gersh Avery	Respond to of 42787

The problem is not business exposure to the Euro .. the problem is what percentage of the companies stock is owned by Europeans. The Euro has been moving up while our markets have been moving down. (for the last couple of days anyway) This is a double hit for the European holder of US stocks. There is a point where losses will get cut. As more of this stock is sold, the proceeds are converted to Euros. This changes the exchange rate of the Euro. As the exchange rate changes those who are still holding US stocks lose even more. This could produce a cascade event. It doesn't matter how much profit a company makes .. it only matters how many people want to own the stock. When stocks go up, people want to own them. When they go down, they don't. What makes the situation worse is that there are huge shorts on the Euro right now. That makes the risk of the cascade event even higher.