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To: Mohan Marette who wrote (9558)	11/25/1997 11:56:00 AM
From: ed	Respond to of 97611

People on this thread are just over reacted to the Japanese , Korean , and S.E. Asia financial/currency crisis. Why? 1)Yamiychi security 's total debt is only 23B USD, and its left asset is more than enough to cover the debt.With the size of Japan's economy,this what people called crisis is easily being taken care of. The japanese government is now offering an unlimitted loan to Yamiychi if it is needed. The government just wants Yamiyichi to be closed down because of its misconducts in the financial world, and return all the money to its customers.This is part of Japan's restructure plan on its financial systems. 2) In China, Hong Kong, Taiwan, the economy is healthy, the dollar is more than enough to cover any crisis. No problem at all. 3) The problem of the rest of East Asia: The dollars were dried up in those countries, this is the only problem in those countries (people called this crisis). Without dollars, those countries can not import, because the standard currency for international trade is dollar. Why the dollar in those countries were dried up: As we know you can do international trade with the following ways i.e "trading goods with dollars", import/export trade "trading currency with currency", investment in security , and the stock market of overseas market !!!! ** "trading goods with goods" a) In the past couple of years, the stock market has appreciated quite a lot in the S.E. Asia, and many foreign fund mangers(mainly from the west) have invested (or dump) a lot of capitals in those market and their paper investment had appreciated a lot. In Octobe of 1997, those fund managers sold out their stocks ( Why October, you probably knew) in the S.E.Asian stock market,and cashed out all their profit for dollars . This caused a sudden drain of dollar reservation in each of the local countries and trigger the currency crisis. For example, in 1996, ABC security from US invested 1 billion Dollars into Thailand's stock market, after two years' their investment was tripled, that is 3 Billion Dollars, and in OCT of 1998 the ABC security sold all their stocks in the Thai market for a total of three billion dollars, and cashed all their investment for three billion of dollars, which meant the Central bank of Thailand had a deficit of two billion dollars, and it lost two billions from its dollar reservation as a result of the appreciation of the Thai stock market and the sold out of ABC security. I called this "Currency trading currency with currency" , the S.E.A is the biggest loser, and their hard earned forign reserve was dried out overnight as a result of the local economic development which pushed the stock market to a record high in the past couple years. So as long as those S.E.Asian countries open up their financial market, the currency will happen from time to time.Of course, if the ABC security just sold the stocks in the local market without cashing out for dollars, the currency crisis will not be triggered. After the S.E.A currency crisis, we found the wall street trading volumes expanded gradually, so there were capital movement to the US market. b) In the past ten years, the development of economy went very fast in the S.E.A, but this development was financialized with debt from overseas to import capital goods for economic development ( unlike China, Taiwan, Hong Kong, Japan , the economic development of those areas were financialized by their own dollar reserve).As the dollars earned from export by those S.E.A countries can not serve the huge debt, then a crsis started from there, and the sold out of stocks by overseas fund managers triggered it. So , the currency crisis is easy to be resolved. The IMF can DUMP anouther billions of dollars ( IMF can just print dollars) to each of those S.E. Asian countries, and let the game( cycle) restart allover again. I did not see any crisis at all !!!!!!!!!!!!!!!!!!!!!!!!!