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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: derek cao who wrote (9775)	10/27/1997 4:53:00 PM
From: akidron	Respond to of 70976

to answer both points. great inequality of wealth distribution hampers growth because the very rich spend less on consumption as a % of their income than either the poor and the middle class. therefore all successfull societies do redisribute wealth to some extent, to make its people wealthy enough to provide a market for its products. this is very different from any concept of socialized equality. this is just an expression of smart business practice on a macro scale. robert rubin is perhaps this ideas most obvious proponant. i think you have misunderstood my comment on the aeroplanes. of course no opperator would intentialy crash his $25 million plane, but in an uncontrolled and unregulated free market that is exactly what would happen, until the losses were so great that society in the form of govenment or a contolling group of opperators intervened, which is why the free markets are not truely free - that is my point, that was my point and looking at your question it would seem that you agree in spite of your self. seeing as this is an AMAT thread let's relate the arguments to the stock in question. my point is that the asian markets that AMAT opperates are fundementally unstable because they cannot possible consume the products of their own production because wealth in many of these nations is very unequally distributed. they therefore export a great deal of there production, but import most of the tools required to manufacture. AMAT has been very successful supplying this need, and I hope, because I'm long (and even longer today) that they continue to be so. however dealing with export economies has certain risks, the greatest is that even though your deals are agreed in dollars, the fab has had to exchange the fast depricating currency of it's home market for the dollars to pay you, and it is possible that they won't be able to and that's when push out bloom. Especially in a situation where interest rates are rising. they have quadroupled in HK in the past week. why are export economies so prone to currency troubles. the answer is that they usally inflate the value of their currency to enable them to afford the capital goods required for expansion, and deflate the cost of imported materials to keep inflation in check. unfortunately this kind of market manipulation often ends in tears. about the spelling... forgive me... i can't spell worth a damn