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Technology Stocks : Creative Labs (CREAF) -- Ignore unavailable to you. Want to Upgrade?

To: Hitch who wrote (7599)	12/31/1997 10:56:00 PM
From: Alan Chan	Read Replies (1) \| Respond to of 13925

Hi Hitch I will not be so brave as to take on a role to dish out economic advice. I do believe that there is going to be a massive 'credit crunch' in Asia, not unlike that in the US in the 1930s. IMF calls for monetary prudence and a 'surplus budget' by the countries that are getting aid from it. It was good for Mexico (with a big budget deficit) but definitely not appropriate for Korea (mostly private debt). Most of the debts of Korea were taken on after it was admitted to the OECD in 1996. Good companies are going down with the bad ones due to 'cash flow' problems. The lenders to Korea has no choice but to roll over their loans (but for how long, especially if the economy is 'forced' to contract?). Japan accounts for about 24% of Korea's debt. It has pushed back its financial liberalisation for one year (which would have required banks to maintain higher cash reserves, thereby contracting credit availability) so that the banks can continue to satisfy only Japan's credit requirements, but will leave the rest of Asia out in the cold. Every 60 years or so, some fools would get together and lead the world into a deep abyss. This time round, it appears to be the gentlemen from IMF, Japan and Korea. (Coincidentally, Japan and Korea are co-hosts for the 2002 world cup). I still see good upside for CREAF (US$30s) but I do not think that CREAF will ever realise its full potential (US$50s) due to the current turmoil! Happy New Year & Good Luck Alan