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

To: ChinuSFO who wrote (11212)	11/16/1997 10:49:00 AM
From: Steve Byers	Read Replies (1) \| Respond to of 70976

Many comments here have voiced that "I think the Asian impact has been way overdone as it relates to the US economy".... From what I read, the South Korean economy is pretty far along the "collapse" road... and the financial system there is in a shambles with bankruptcies at some unbelievable level (20% sticks in my mind but don't know if thats correct or in what context it was given)... and South Korea is Japan's #1 export competitor... and Japan's economy has been in a downward spiral for some time too, with short term interest rates below 1/2 %... while just over 5% here... Japan last week announced an anemic stimulus plan which most seem to believe will do nothing to get their economy going again, and there is supposed to be another major financial bailout meeting around Dec 10-12... however, between now and then, if Japan and South Korea step up their exports substantially, and begin to sell off their more stable securities holdings (US debt and equitites) and also CONTINUE to sell off some of their CROSS holdings, both the markets there and here could well be significantly weaker... and if this pricing pressure helps take prices of our goods down, which it likely could, then forward earnings estimates will be shaved, furhter spiraling prices down... so there is a very REAL impact of the next 6 months Asian events which very well COULD keep a lid on prices here and globally...(not to mention the March (year end) balance sheet cleanup for Japanese companies which WORLD markets have taken into consideration every year since the Japanese markets have been so weak...) not to mention Saddam, which I think would be a much shorter term event/impact... could be a week or three impact, providing it goes well and they don't get hostages, pilots, or otherwise... and providing something else unforseen happens, another major sabotage on US soil and stepped up bombong in the middle east... not to mention that the coalition which was cemented in the early 90's might not hold together... who knows, but I do believe that the Asian impact has not yet run its course and could yet be a major impact on our economy (for which I am NOT at this moment positioned or hedged)... although I'm not currently margined and will likely take alot off the table after next Friday's news on amat... that action will give me the room I would like to have in the event these Asian events DO take the route outlined above... and then again maybe they will just stabilize and these events won't come to occur... thats what is built into market volatility these days... good luck (I'm not an economist so these are merely my views on potential events... I'm long the next week, will be in mostly cash Dec/Jan... and long after that, depending on what the next few weeks have to unfold... in the 12-24 month scenario, I'd have a mix of amat stock, short 3 month puts out of the money to take in premium (and if the stock really moves up in the next two or three weeks, might be long puts) and long jan 00 leaps... and the same for compaq and intel... no funds, no other holdings, although possibly Teradyne, klac and qntm in the near future if correction gives some more value)