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To: Rational who wrote (9124)	11/23/1997 7:55:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 18056

Sankar: Unless those US equities drop dramatically (and then it is too late), I fail to see why foreign companies will be forced to reduce their holding of such equities. Last time I checked, investments are carried on the books as assets (and in Japanese companies these are marked to market only quarterly or even less frequently). Selling assets will reduce the assets side of the balance sheet (even if the money is used to pay off some of the the liabilities). If they sold all their assets, the ratio will increase to infinity (zero assets but still 2/3 of the liabilities). It is inconceivable that a drakonian law will force all Asian companies over night to get their balance sheets to a 1:1 situation, If that was called for (and this will be a major deviation from the current standards of doing business in Asia), it will be a gradual step over a large number of years. If they required that within a short time all companies that do not have a 1:1 asset to liability ratio cannot go to the lending well, they will precipitate a wave of bankrupcies and a depression worse than 1929. The balance sheet of corporate America took a good 10 to 15 years to come to its current healthier condition. And many companies still have the ratio at much higher values than 1:1 and than, most they have to do to get loans, is pay a premium (and not too big for that ) over prime. Zeev

To: Rational who wrote (9124)	11/23/1997 8:12:00 PM
From: Paxb2u	Read Replies (1) \| Respond to of 18056

Sankar, Thank you for your response. What you say makes sense to me. However, what would you say is the reason for this lack of recognition of the situation on the part of the US markets? I can't help but believe there will be domino effects throughout the world. However, thats not to emphasize the strength of the effects. I have no feel. That could be a pebble into lake with a few ripples, or a boulder making waves throughout the system. I do know, there are a lot of people a lot smarter than me who must be looking at the same things I have, and up to now have decided its a ripple. For the sake of small investors I hope its the latter. My understanding is that the smart money (?) has been moving out of equities for several months leaving only Joe Public in equities. So far, Joe has held up pretty well. Thank you, for your replies, you have a lot of insight, and I really appreciate your sharing. I hope you have a good week, Peter :o)

To: Rational who wrote (9124)	11/23/1997 10:09:00 PM
From: jeff wheatley	Read Replies (1) \| Respond to of 18056

Sankar - Do you have any information concerning overall levels of investment in US equities from Asia? I wonder if there are other US companies exposed to the extent of YHOO. Thank you for a very interesting angle on this ongoing problem.