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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (1376)	12/13/2000 6:42:24 PM
From: TobagoJack	Respond to of 74559

Hi Ron, Defense industry pure plays are getting more limited in numbers as many had to jump on the civilian cyclical acquisition trail or had been acquired by the civils. But, as we agreed, war across the Taiwan strait is a non-starter, especially as both sides of the strait are populated by capitalists, with one side the biggest investor and indirect offshore employer in the other side, and with the resultant dividends and products flowing in the opposite direction. Difficult to fight a war when one has to finance one's own enemy in such an undertaking. On Indonesia. Yup, there definitely was a Chinese conspiracy during the 1950-60s (Indonesia, Malaysia), and there may be again. Republicans know this. Dems do not. Republicans believe China ought to keep off Indonesia. Dem think China ought to pay its workers the same as US does in Detroit. I got a bunch of relatives via marriage, some were/are Japanese sympathizers in Taiwan and got fabulously rich that way, some are Communist adventurers in Indonesia/Malaysia/Singapore and got equally rich that way, and it appears to me that all the network linkages of the various camps are still in place. Asia is complicated, and politics is only an extension of business, as derivative is related to integrals.

To: Hawkmoon who wrote (1376)	12/13/2000 6:49:20 PM
From: TobagoJack	Read Replies (1) \| Respond to of 74559

A clipping from Financial Times on Taiwan banks. The actual problem is in the neighborhood of 4x (NPL @ 25-44%, with 70% not recoverable) as bad as described here, and there are still no talks in place for any consolidation/merger because that would involve opening the books to ones own competitors, risking a rumor triggered run that would bring down one's own bank, or at least the asking price. Prisoner's dilemma - do you wait for your competitor to start a rumor based on facts gleaned from DD or do you do it to him first? In the absence of effective punishment via law, rumor making is part of business acquisition strategy. QUOTE Bad debt dogs Taiwan banks By Mure Dickie in Taipei Published: December 12 2000 18:42GMT \| Last Updated: December 13 2000 08:42GMT The number of problem loans held by Taiwan's banks and the cost of their disposal is likely to be far higher than official estimates, suggesting that lenders may prove unwilling to sell their bad assets, according to a report by Fitch IBCA, the rating agency. However, the report - to be released on Wednesday - says that Taiwan's financial sector problems remain "manageable", despite the dramatic effect on banks' balance sheets that would be caused by any attempt at serious reform. The report underlines the challenge facing Taiwanese officials as they struggle to ease rising fears for the safety of the banking system. The Ministry of Finance is relying on foreign and domestic investors to set up asset management corporations (AMCs) to buy problem assets from banks. The government has suggested that losses are unlikely to exceed 30 per cent of the value of non-performing loans (NPLs), which are officially estimated at around 5.5 per cent of total lending. However, the Fitch IBCA report concludes that NPLs are more likely to total more than 10 per cent and could be as high as 12-15 per cent. It says the experience of bad asset sales in South Korea suggests that average losses for secured and unsecured NPLs could be around 60 per cent. A similar recovery rate in Taiwan would mean that at an NPL ratio of 11 per cent, equivalent to T$1,534bn (US$46bn) in problem assets, disposing of all problem loans would require write-offs equivalent to 340 per cent of banks' 1999 pre-provision profits. Even much lower levels of disposal would have a massive impact on the balance sheets of a banking sector with "disappointing" transparency, and lenders that believe they can hide the scale of their problems may well continue to do so, the report says. "In recent years, Taiwan's banks, for the most part, have avoided valuing their assets at realistic prices," it says. "The sale of non-performing loans will involve, firstly, recognising that the level of problem loans is greater than has been reported, and absorbing losses on loans for which the banks are not reserved, or are lowly reserved." However, the difficulties are not insurmountable if bank managers can be made to recognise the scale of their problems - and the resultant losses could be a force for consolidation in the over-crowded sector, the report says. UNQUOTE

To: Hawkmoon who wrote (1376)	12/14/2000 1:30:13 AM
From: Rolla Coasta	Read Replies (3) \| Respond to of 74559

China doesn't have the resources necessary to invade Taiwan with any confidence of success. Nobody in Asia wants war, as it is bad for local businesses. But for US, maybe we could buy cheap Asian stocks on the ground floor during wartime in faraway battlefields. I guess foreigners really want to divide China piece by piece and dominate the Chinese market one piece at a time. That's what the Chinese gov worries most against these kind of foreign attitude towards China. And the foreign business people generally do not respect the local culture, like what the Brits did during the Opium War 100 yrs ago - they burned the culture and stole the relics there and sold drugs - that's the true bad color of capitalism.