Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: t2 who wrote (81017)	6/18/2002 8:52:42 PM
From: public_heel	Respond to of 99280

t2, it may be true that "most" foreign funds are in American bonds, but that still leaves an enormous amount in American equities. Foreigners would not have to withdraw a large percentage of those funds to push our markets over the edge, IMO.

To: t2 who wrote (81017)	6/18/2002 9:07:30 PM
From: Zeev Hed	Read Replies (2) \| Respond to of 99280

There are few ways in which a weaker dollar can hurt US equities: 1. A weaker dollar could increase inflation (and thus put pressure on rate competing with equities). 2. Great weakness of the dollar can force repatriation of US dollar denominated assets (stocks and bonds, thus causing yield on bonds to rise and price of equities to fall) 3. A major danger is a catastrophic rapid change in th dollar's value relative to other currencies. That could create destabilization and "freeze up" of the financial markets as hedged situations (such as the Yen carry trade and equivalent) are unwound in illiquid markets. The only benefit of a weaker dollar is for major exporters, and for companies deriving a large portion of their revenues overseas, the former become more competitive, the latter report higher revenues in dollars for the same sales in foreign currencies. Zeev