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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (12311)	12/24/1997 10:40:00 AM
From: Barbara Barry	Read Replies (1) \| Respond to of 18056

Zeev,Mohan et. al...Happy Holidays and my warm wishes to you and yours.Thanks for all the great posts. May we all have a great and safe 1998! All the best, Barbara

To: Zeev Hed who wrote (12311)	12/24/1997 2:40:00 PM
From: Joan Osland Graffius	Respond to of 18056

Zeev, >>I think I have explained before that I view this as a minibear market or a cyclical bear market, not a secular one. Sorry for not recalling your thoughts. I agree with your thoughts on this market at this time. My memory is good, the problem is it is short.<ggg> Happy holidays, Joan

To: Zeev Hed who wrote (12311)	12/26/1997 9:24:00 AM
From: geewiz	Read Replies (2) \| Respond to of 18056

Zeev, while your knowledge to the asian crisis is a lot better than most of us on this thread, I believe our views differ in the magnaitude of the crisis. It is most assuredly not a "Mexican" crisis. It troubles me that many talking heads on the television reassure the investing public that we have seen this before. 1 Mexico got into a liquidity crisis defending the peso. SEA is in a solvency crsis due to overconstruction of manufacturing capacity funded with international money for products that have reached saturation in the market. 2 This overcapactiy will have a cascading effect on other governments not just banks. It is likely to become a political crsis in several SEA countries. Indonesia is a powder ceg waiting to blow up with the Chinese and Muslims at odds in the economic specturm. We are also very poorly informed as to the extent of the Chinese surplus inventory and bank insolvency. 3 The scope of the insolvency is hard to imagine at this time but suffice it to say it has not been wittnessed before, and the response has so far been underwhelming. From my limited understanding it's as though there has been some successful intervention to prevent the scope of the problem becomming evident. Intervention NEVER works. This is postponement of the final accounting and will make the future crsis even worse. The worlds' most powerful banks and treasuries are behind this move so it may work for a while, that's the part that is hard to gauge. It might work for another few quarters. No need to respond to my post, I am only trying to clarify on how the views of the thread differ. Always enjoy your posts. Happy Holidays to all! art

To: Zeev Hed who wrote (12311)	12/28/1997 12:04:00 PM
From: tekgk	Read Replies (4) \| Respond to of 18056

Zeev, I hope that you have been enjoying the holiday season. Although I agree with most of what you have posted over the past few months, I disagree on one issue. I believe that we are about to enter a true secular bear market. Commercial enterprises require the rule of law and stability to grow and prosper. By rule of law I am referring to contract and criminal law. Contract law is necessary for commerce and criminal law creates peace and stability. If government officials are above the law then short term progress can be made through investment of resources, but a collapse in the long term is inevitable. None of these principles are evident in what was once the former Soviet Union. The regular execution of tax collectors by local war lords spells total chaos for this region of the world. We have already seen how the sale of nuclear weapons materials can be used to raise money and to extort money from the IMF. As the collapse continues it will only get worse. Russian mafia warlords with nuclear weapons - there is a frightening thought. Asia is mired in corruption. The special favors and powers of party officials in China and most countries in Asia also spells chaos. The unproductive use of resources and the resentment that it creates will lead to social and political tension. The 150 million people who will lose their jobs over the next few years as bankrupt industries close in China does not look like a recipe for progress to me. Chinese banks are completely and totally bankrupt. The inbreed relationships between government and industry in SEA is a certain recipe for failure. China started this current round of devaluation's and will likely be forced to initiate another round next year. The impact of the first round is now clearly visible; the impact of the next round spells total disaster. Even Japan which at least tries to operate under the rule of law is mired in scandal at the highest levels. India may be one of the few countries in Asia that may escape the chaos. Even here, I remember the variety of payments needed to move a shipment from here to a commercial partner in Bangalor. Long term investment requires stability. The recent currency turmoil that started in Asia is now spreading to Eastern Europe and South America. Even Canada, a G7 nation is experiencing a run on its currency. The United States with it's massive current account, trade deficit and budget deficits will eventually be impacted by the sale of bonds by floundering nations. (The budget deficit is not disappearing - the big items have simply been moved off of the books). It's not the size of the impact that's the problem it's the fluctuations that make it very difficult for companies to invest internationally without certainty of return that is the problem. Competitive currency devaluation's have the same impact as trade barriers plus they decrease stability the primary ingredient for progress. Don't get me wrong, I am not an end of the world type of person. I just don't see a situation where the rate of progress can continue at the pace of the last decade. Countries mired in corruption have a way of eventually forcing the despots out of office - but it takes time. In constant dollar terms markets follow a fairly regular pattern. We are at the end of a cycle. Over capacity, excessive debt need to be worked off. I think that it will take around 12 years to work off the current excesses. The following graph sums up my feelings: cpcug.org The are many more arguments too be made on both sides of this argument. I look forward to your response, which I always find to be well reasoned and stimulating.