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.

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

To: R.Lui who wrote (38)	12/22/1997 1:19:00 PM
From: eddie r gammon	Respond to of 9980

Well said good luck erg

To: R.Lui who wrote (38)	12/22/1997 3:19:00 PM
From: DRRISK	Read Replies (1) \| Respond to of 9980

R. Lui, I will rise to the question and try and answer what I consider to be the cause. I do not believe it to be Currency traders they are a symptom of the disease and Asia must look internally to solve the problem. The markets in Asia partcularly Japan have refused to surrender to the globalization of the world economy. For years Japan has suffered the delusion that their financial system is sound and have steadfastly adhered to a closed market mentality. The US has gently and at times harshly tried to open the doors to fair markets. The present crisis is the outgrowth of decades of protectionistic policies that have not allowed the finacial systems in Asia to catch up to their manufactuing and technology might. The US went through a similar transformation in the early 90"s to emerge stronger and more accountable. It was called the S&L Crisis that was largly precipitated by the same forces at play in Asia. Unsound Capital Investments by Gunslinging crooks that nearly bankrupted the system. The solution was a overhaul of the system. The Federal Reserve moved swiftly to lower interest rates and particularly the crucial Overnight lending rate to allow the banks to right their ships. The country held its breath with the likes of Citibank and Chase were on the verge of insolvancy. You have very similar problems and they will not be fixed without major reform of the Slimy people who use political clout to get financial favors. You must heal yourselves and weed out the Bad guys because there are plenty. Put them in Jail and throw away the Key. Good Luck, Soros is only a symptom of the problem you are full of Political Crooks and Elitist Slobs who think they can do no wrong. DrRisk keep posting

To: R.Lui who wrote (38)	12/22/1997 11:25:00 PM
From: Stitch	Read Replies (3) \| Respond to of 9980

Mr. Lui, This thread is open to all comments including mind numbing repetition of the anti western sloganeering that has been popular in Asia recently. At first I was loathe to respond but maybe in your blundering way you have sparked an honest and credible debate on the "why" of things. You asked what I think is the cause of the Asian economic crisis. Sankar and DrRisk have offered credible comments in this regard and are more qualified to comment then I. But I will venture my own comments as well gleaned from the reading I have been doing. Did Soros and many like him sell Asian currencies, sometimes selling forward for delivery at much lower acquisition costs? I don't doubt it for a minute. But as DrRisk noted, that is an affect, not a cause. For Asians to blame Soros, and currency traders in general is equivalent to laying on a huge banquet, on a beautifully set table, with delicious food everywhere, and then blaming the invitees for eating the food. What do I mean? The problems in Asia are a classic case of greed, refusal to recognize the excesses, and the building of a financial house of debt instead of real equity. Further it is a case of leadership, which refused to recognize the early signs and instead seemed intent on building the latest grand public edifice. The real problem began in the Summer of 1995 when the U.S. dollar began to strengthen. That meant that as most Asian governments shadowed the U.S. dollar, or in the case of Thailand , actually fixed their currency to a basket of currencies of which the US dollar was 80%, their currencies appreciated also. That meant that exports became more expensive as imports became cheaper. The result was a huge demand of imports that resulted in a widening current account deficit. To add more problems there was the growing corporate debts, much of it pegged to the USD as rates were cheaper from off shore sources. Unlike former dominance from large banks like B of A or Sumitomo, who maintained large "third world" loan portfolios, the new sources of capital were young and savvy private institutions whose only allegiance were to the most lucrative investments with the least risk. Money poured into Asian countries attracted by the size of their markets, the productivity of their populations, and the sense that transparency was improving. However there is much debate about this. A 1996 study entitled The "Human Development Report", published by the United Nation's Development Program states that decision makers "have too often embraced policies leading to growth that is jobless (actually creates unemployment), ruthless (benefits only the rich), voiceless, (suppresses democratic expression), rootless (destroys links to community and culture), and futureless (destroys the planetary life support system)". These are strong words and certainly there is rebuttal. Rueben Mendez, a development economist from the Phillipines, said "the record shows that during the post-colonial period, foreign investment has promoted development by expanding the number of jobs, increasing foreign exchange for importing capital and consumer goods, diversifying economies, and building industries. This debate is a timely one. I lean more to the latter argument but note that there have been excesses and mismanagement that must be curtailed. I particularly would address leadership voids that existed in some of the countries involved, most notably Thailand and South Korea. In addition I would note that excesses have occurred , most notably, the funneling of cheap foreign investment into projects that have not served the region well. I will quote Robert McKee of the London Independent strategy Council. "So much investment has been wasted particularly in the property areas." He goes on and says "Its been in areas of hubris, prestige, the big towers, the big roadways, stadiums, development projects of dubious value. It might add to the apparent lifestyle and general social conditions but it doesn't necessarily add to the productivity of the economies." In summary the reasons for Asia's current difficulties are related to a rising external deficit coupled to an increasing amount of external debt in dollar terms. This in turn has drastically affected local stocks as investors grow increasingly wary of the difficulty of companies faced servicing this rising cost in debt. In addition much of the cheap foreign investment capital placed in the hands of corporations and banks ended up in areas that did not contribute to export led sectors of the economies but rather into prestige projects of little return value. Mr. Lui I do not bear you any personal ill will. I do bear ill will to misinformation designed to fan the flames of xenophobia and even racial bias. (Not to mention the casting of blame elsewhere.) You see we are increasingly members of the same community, specifically the "global market". To that extent we will have to find ways to work together to overcome the problems of integrating the various nation economies into a truly homogenous and seamless economy. There are few of us, if any, on these threads that are rubbing our hands in glee over the Asian crisis. It may get worse before it is over. The IMF has warned that it will in a release on Saturday, dec. 20th. Here is the link to that press release: yahoo.com Finally, in closing, I would like to offer another link for all to visit: It is a parable of "monetary neutrality". I believe you will find it informative. members.tripod.com Very warm wishes for a good holiday season and a better New Year. Best, Stitch

To: R.Lui who wrote (38)	1/2/1998 1:04:00 PM
From: HB	Respond to of 9980

Almost every time a country is entering a foreign exchange crisis, their finance minister starts moaning about attacks on the currency from foreign speculators. George Soros is such a speculator, and may even be mentioned by name by some of these finance ministers. And, he often is speculating against these currencies. However, IMHO, most often such speculation is well-founded, and the finance minister is trying to support currency at unsustainable levels. Smart speculators know this will end sometime, and they will make a bundle if it does. Blame the finance ministers who try to keep the currency overvalued, and perhaps the private sector borrowers who almost never pay the full price for their default... and when a government complains about currency speculators, HEDGE!!! Soros is at least talking about possible solutions to prevent or mitigate the recurrence of such bubbles, even as he takes advantage of them (although he claims to have been surprised by the magnitude of the SE Asian difficulties this time, which may mean he didn't take full advantage of them.) I do agree that some of the IMF rescue techniques seem to bail out multinational banks and "third world" fat-cats at the expense of US taxpayers and ordinary third world citizens and workers... Soros seems to be suggesting we try to find ways to put the risk more where it belongs... while trying to guarantee needed capital flows for sound and important projects. Difficult questions to resolve. Problems are much more deep rooted than speculative currency attack, though. Sorry people are attacking you personally; I think what was meant by some of those rude attacks was that you were perhaps somwhat gullible in buying a demagogic explanation put forth by some of the people who have goofed up, to blame Soros for mistakes which are in part theirs, and in part systemic and hard to pin down blame for. Best of luck in investing and best of luck to those in Asia who are being affected by this crisis. Howard