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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (4513)	8/29/2001 10:36:05 PM
From: Chip McVickar	Read Replies (1) \| Respond to of 33421

John, Many good statements in that article..., add to it the worries about international banking loads, hedge fund troubles, changing forex positions and we have the ingredients for volatility in the banking worlds. Here's some thoughts from a friend close to the know..., the Baum article on Argentina. "Thanks for the article. This is a viewpoint that I've heard a lot among news commentators and others...though not many around here as we deal with the people that will lose millions if Argentina defaults. This is not to say that people don't think that Argentina will eventually be forced to devalue, default, or both. On the FX desk, they seem to be more interested in WHEN this will happen. There is some skepticism as to whether these multi-lateral efforts will do any good (they did nothing for Russia in 1998) when Argentina still has a fixed, overvalued exchange rate and a massive debt overhang. However, some are guardedly optimistic that the big boys will continue to shell out more money (a view prompted by Stanley Fischer's recent comments in re the $3 billion restructuring fund and yesterday's meetings between big international investors and the US Treasury department). Who knows how it's going to turn out. What we do know is that because of Argentina, everyone is freaking out about emerging markets and money is flooding into Japan, propping up the yen when that currency should be crashing and burning a lot more than it is now. I've heard from a couple of places that a really smart trade right now is buying yen puts. Some people also think that Brazilian equities might be oversold because of general EMG fears, but I'd be careful. "