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To: John McCarthy who wrote (6508)	10/25/1997 4:43:00 PM
From: flickerful	Read Replies (1) \| Respond to of 25960

<<offtopic>> JOHN. is that you?

To: John McCarthy who wrote (6508)	10/25/1997 5:47:00 PM
From: D.J.Smyth	Read Replies (3) \| Respond to of 25960

John, interestingly, Compaq, Dell, HP and IBM all reported "strong demand" for low end PCs in China. You can find these comments under past Compaq and Dell releases. Much of the capacity is being soaked up by stronger than anticipated demand in Mexico, South America, Europe and China. Total Production Capacity does not equal Over Capacity as some have incorrectly interpreted in the media. The Malaysian plants won't produce parts below their cost, nor will the Japanese. One point that Makin DIDN'T mention was that the cost structure difference between the Thai/Malaysian markets was coming close to the production cost structure of the US - Globalization - so many companies moved to that area creating a larger than anticipated demand for a specialized workforce which caused material costs and labor costs to rise dramatically the past two years - a la the move to China. The labor gains made by the Thai and Malaysian people will not be given back. As their currency continues to strength, as it has, it is unlikely any significant discrepancies in overcapacity will continue.

To: John McCarthy who wrote (6508)	10/25/1997 6:06:00 PM
From: D.J.Smyth	Read Replies (1) \| Respond to of 25960

One last point John, if you care to respond: The Japanese are NOT underemployed. They have an unemployment rate of about 3%. The Japanese people DO NOT invest in their stock market as a matter of investment principal. The Japanese have been selling everything they've been making, their unemployment rate has not gone up, and the Japanese people continue to save 20% of their income (in life insurance, bank C.D.s, etc. - the lowest possible return vehicles). Institutions even avoid investment in their own Japanese markets. The stock markets in Japan are controlled by a few large banks and the government. Comparing OUR market with the Japanese market is not a fair comparison. There has been a good deal of money made in our market; wealth yeilds wealth. In Japan there has been no money made in their market for several years now; no wealth yeilds no wealth. You can not create wealth in Japan until you create demand for their markets. The Japanese companies and people are doing fine. They don't give a rats a.. about their stock market. The same statements regarding overcapacity were made in Decmeber 1995 and the box makers stock fell precipitously Compaq fell from $52 to $38 (pre split). The same comments were made last year at this same time and the box makers stocks fell again. Is this another such time?