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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: robnhood who wrote (7981)	11/15/1997 5:54:00 AM
From: Jack Clarke	Read Replies (4) \| Respond to of 18056

rrman, Sankar, and all: Speaking of the Federal Reserve, Lawrence Lindsay, former FR governor, was interviewed on the popular Moneyline show with Lou Dobbs last night (CNN). I was surprised to hear him state bluntly that nobody should hold equities. Lou Dobbs frowned as though he had suddenly thrombosed a hemorrhoid, but tried to put a positive spin on at the end of the interview (see below). Dobbs also interviewed Robert Hormats, Vice Chairman of Goldman, Sachs International, who was less pessimistic. The only question in my mind is whether Lindsay was referring to all (including US) equities or just those in Asia. I transcribed this part of the interview and will reproduce it here, (I think) verbatim. What do you guys think, and what are the implications? LD: And to our viewers in the United States -- around the world, what would be your best counsel, Larry. Give us ... this is indeed sobering discussion ... give people as investors and concerned viewers your best judgement of what they can expect and what should they do in this milieu. LL: Well I think we're in a situation where industrial asset prices, call it stocks if you will, are gonna be having a bargain basement sale next year,and I don't see any reason why people should be holding equities right now. You'll be able to pick them up in a year from now in Asia at fire sale prices. I think it will not only depress Asia still further but it will have ramifications on profit margins here and on the equity prices which reflect those. LD: Bob? RH: I'm not quite as pessimistic. I do think there's gonna be a lot of volatility; this is a simmering problem. It's gonna flare up in various parts of the world, and there is a risk out there -- particularly in Asia -- that will affect our markets, but I still do think our economy's in relatively good shape, Europe's in relatively good shape, and most of Latin America is, so I think there'll be a lot of volatility and will (sic) be buying opportunities, but for most investors, with respect to Asia, it's still important to be cautious and do a lot of due diligence and don't plunge back into Asia just because it looks tranquil temporarily, because there are a number of elements that are still going to be ahead of us. LD: Gentlemen, you've given us a lot to think about, some of which most of us don't want to think about. Nonetheless, thank you for sharing your views ... and coming up next on Moneyline a closer look at today's exuberant rally on Wall Street. We'll focus on some good news and also some earnings surprises that were not altogether pleasant. Stay with us. SORRY FOR LENGTHY POST! JACK