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To: SKIP PAUL who wrote (6465)	12/14/1997 8:22:00 PM
From: dougjn	Read Replies (1) \| Respond to of 152472

Yes, I think the FT story you just quoted is what I've been saying, although I think weekend estimates are 6 bill in Foreign reserves. The basic problem is that Korean banks, companies, are hyper leveraged. Their cos have been making very low returns on equity but making debt payments (barely) by having sales growing at very fast rates. All in all, they have lousy financial controls. So, comes a downturn. Mkt looses confidence. Foreign banks demand more and more interest to roll over debt. Wan plumments. Debt denominated in Wan rises correspondingly. With huge debt/equity ratios, and lousy returns on capital, Korean cos have few reserves to deal w/liquidity crisis. Crisis spirals rapidly. Lying doesn't help market confidence. Doug