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To: j g cordes who wrote (27747)	11/3/1997 6:26:00 PM
From: Patrick Slevin	Respond to of 58727

Unfortunately, Hong Kong is part of the much vaster Asian market, as I'm sure you appreciate. The real problem is, foreign traders pressured the US to help the bailout by selling the dollar last Tuesday morning/Monday night. The US caved into that pressure and, in my pessimistic stance, only delayed the real decline.....whether it be sudden (Sharp selloff) or gradual (1969 thru 197x). I guess you're talking to the wrong guy if you want a bullish scenario...I think the global issue is going to be a dominoe effect perhaps culminating in a derivatives issue. Anyway, people get excited about short-term news....in my opinion there is no positive long term news. What would happen if a series of earnings downgrades hit? ~~~~~~~~~~~~~~~~~ Sorrie if I seem a bit out of sorts....I reached for the pepper only to find Tom Cruise cleared the condiments off the table.

To: j g cordes who wrote (27747)	11/3/1997 7:00:00 PM
From: Dwight E. Karlsen	Respond to of 58727

Jim, re >What I don't like is the news media portraying this as a rally because confidence returned to the Hong Kong market. Yet it seems that is exactly what is the case: Starting Friday, Nov. 24th, the US stock market started intensely following the Hang Seng/SE Asian semi-equip worries. Tues, US stocks reached oversold levels, and brave bargain hunters moved in, providing a bottom with rebound the same day. From there, it has all been a game of tag with the U.S. & Hong Kong. Notice that the only real selloff in the US since the inital Tues bottom was Thursday, which not coincidently was after the Hang Seng gave back some of it's gains on Wed. following it's Tues rout. Hang Seng rallies Friday, US rallies Friday. Hang Seng rallies even more on Monday, US rallies even more on Monday. Granted that both markets are rebounding from oversold status, but I find it difficult to accept that suddenly there are no concerns in Hong Kong: Hong Kong did in fact raise interest rates last week in a successful attempt to discourage currency speculators. Will they dare lower them back down? For the near future, probably not. Higher interest rates in Hong Kong should result in muted Hang Seng stock market gains. In addition, eventually (like soon) there will be a pullback in the Hang Seng. Will US investors stop looking at the Hang Seng? They haven't yet. DK