Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: John Hunt who wrote (8985)	11/22/1997 4:40:00 PM
From: Rational	Read Replies (3) \| Respond to of 18056

John and others: A very important macro-economic development (as I envision) may be: the failing Japanese, Korean and other Asian banks have to liquidate their assets. These banks have had enormous holdings of US stocks (as well as US Treas), bought through their trade surpluses. These stocks will have to be sold to pay off bank creditors. Since such selling will have no further impact in their economies, the Asian countries will have no second thoughts (or alternatives) to sell US stocks; but this will have a devastating impact on US stock prices. Thus, for the US stock prices to fall dramatically, we do not have to wait for corporate profits to decline or the interest rates to rise, IMHO. Further, if some of the US Treasury holdings of the failed Asian banks have to be liquidated, this will push the inerest rates up, compunding a fall in US stock prices. Sankar