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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: current trend who wrote (9)	12/21/1997 7:20:00 PM
From: DRRISK	Read Replies (2) \| Respond to of 9980

Current, This is classic IMF jaw boning and I think that this is intended to knuckle under the ruling elite. The governments are changing and the election in Korea is emblematic of that change. """The crisis may even pass along a few benefits to the former "Asian tigers". It may help the region put a lid on large current account deficits as private capital moves elsewhere, the IMF said. "These economies have the potential to regain the confidence of investors at home and abroad," the IMF said. "As confidence returns, growth can also be expected to recover."""" DrRisk reading between the lines

To: current trend who wrote (9)	12/21/1997 10:47:00 PM
From: Pete Young	Read Replies (1) \| Respond to of 9980

For those countries already affected, the IMF said economic reforms must not be put off. Hesitation can only worsen the crisis, cause markets to drop further, and exacerbate contagion to other emerging markets and to more developed countries, it said. The crisis has already led to a dramatic slowdown in private capital flows to emerging economies in all regions, with the sharpest drop in Asia, .... <snip> Painful adjustments will need to be made in emerging markets around the world, the fund said, as fiscal policies are tightened, domestic investment and consumption are compressed, imports decline, and economic growth slows or, in some cases, turns negative. Someone check me on this, but is the IMF requiring that these Asian economies, as a condition of aid, "compress" consumption? Seems to me, and increasingly to the conventional wisdom, that worldwide, the economy is suffering from a lack of demand. Our technologies can produce goods with fewer and fewer people, productivity-enhancing software even eliminates white-collar jobs, much cheaper economies with lots of eager, hardworking, young workers await any industry that can relocate from the "advanced" economies...end result, companies are firing their customers. Look at the producer price index for this year...we're in negative territory...and the former Asian "tigers" have not yet started to really try to export their way back to economic health. No news here, but any guesses about the severity of deflation we're into now? Is this a replay of the 20's...too many goods chasing too few dollars leading to a creeping unemployment/underemployment leading to protectionistic sentiment...leading to... I just read a story in Harpers on LePen's National Front in France. Seems that most of his followers are ordinary folks worried about immigration from North Africa (read, competition for scarce jobs)...they don't realize all that they are buying into. It's just that the conventional political spectrum is not addressing their fears. Sounds to me like some of the protofascist movements in the USA (Father Coughlin?) in the late 20's. In summation, it seems to me that we are putting together some of the same kind of stresses that led up to things like WWI,WWII, and the Great Depression. It also seems to me that world politics (probably because of the world economic linkages existing even then, and esp. now) seem to move in sync now---and then. (Consider R. Reagan and M. Thatcher, Hoover and Hitler) Talk to me about deflation and consumer demand. Tell me why I'm wrong, here. Please.

To: current trend who wrote (9)	1/8/1998 12:56:00 PM
From: current trend	Read Replies (2) \| Respond to of 9980

A look at Hong Kong---since the turmoil began. asia1.com.sg It's easy to watch markets collapse at a distance---- waiting for the bargins to appear--- there is a human price---- it's being paid all over Asia. CT

To: current trend who wrote (9)	1/12/1998 7:34:00 PM
From: current trend	Read Replies (2) \| Respond to of 9980

Joe Battipaglia, Chairman of Investment Policy 1/12/98 We have entered what I believe is the last part of the second round of panic in the global financial markets. The issues continue to be both a currency and banking crisis primarily in the Asian region but whose effects have been felt globally. There have been some positive and correct decisions made over the last few weeks that will have positive implications over the next several months. First, the fact that the Chinese have decided to support the Hong Kong peg is a positive sign. The second proper decision was to allow Peregrine Ltd., one of their largest banks, to fail. Peregrine was formed during the "easy money" of the 1990's and much of their lending was to Indonesia. Most of these loans will more than likely not be repaid. In Korea, they have decided to pursue an IMF bailout plan ranging from fiscal spending to negotiations concerning the labor movement. This has been viewed as a significant positive and has rallied the Korean financial markets of late. This is important because Korea is one of the major economies in the region. The Japanese, who are the largest lenders in the region, are directly engaged in the bailout efforts and have capital availability. Ironically, it seems that this would be a precipitous time for the Japanese to sell some of their U.S. treasuries and re-deploy the capital in the Asian region. I do not believe a sell-off of U.S. treasuries by the Japanese will effect U.S. interest rates significantly. This is due to the fact there is a scarcity of treasuries around and the U.S. government has not issued much new debt recently. If this should occur, it should not be viewed as a negative but more so as a net positive since the capital would be used to help the bailout plan in the Asian region. In my opinion, interest rates in the U.S. are destined to move lower. I believe the Fed will cut the discount rate by 1/2 point in the first quarter. This action would help with the bailout in Asia and take some of the pressure off the dollar, which continues to rise against all currencies. Also, the Fed has accomplished everything they have set out to do so there is no reason to have a 5 1/2% discount rate nor for the U.S to have a flat yield curve. In the end, I see a long running era of price stability for the developed world. This is a major net positive of all the restructuring of the 1980's, the economic expansion of the 90's, and now the restructuring of the financial order. U.S. companies will gain global market share against its competition, particularly Japan. Europe is in the midst of a decent recovery that has been largely ignored due to the events in Asia. My suspicion is that we are in the midst of a sell-off. Last year, we had 3 selloffs and this is the first of several for 1998. However, I continue to believe that we are on track for another good year for financial assets. The U.S. economy will turn in a strong performance and lower interest rates will benefit the financial markets. We believe we are poised properly with our investments in technology, health care, transportation, and real estate. We are not changing our expectations and will ride out this tumultuous time that we believe will rebound faster than most anticipate. This report is only a summary of research reports published by Gruntal & Co., ---------------------------------------- Thoughts, comments, observations--- CT