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To: xiangheng xu who wrote (4983)1/10/1998 11:31:00 AM
From: Jim Lou  Read Replies (1) | Respond to of 19079
 
xiangheng, HongKong's problem, for example, is more real estate related. Tech sectors there were victimized, because of the financial crisis, which means, as soon as money problems get eased, growth and demand in the tech sector resume rapidly.



To: xiangheng xu who wrote (4983)1/10/1998 8:25:00 PM
From: Brian Moore  Respond to of 19079
 
<< Asian problmes are mainly a financial one. That is, many companies borrow too much, expand too fast. Now they have troubles paying their debts. Once new money comes in, the problems can go away as quickly as they started. >>

If road construction in front of a store on Main Street causes sales to drop off dramatically for a month or two, they may need a loan to allow them to continue to order products to put on the shelves. Customers will come back when the road construction is over and the store can pay off the loan over time. The store had a short term cash crises and the loan fixed it.

If too many stores are built on Main Street, there may not be enough business to support them all. When one has trouble paying its debts, a loan won't help, because next month sales will still be slow.

We'll see soon enough whether $12 billion here and there will solve the problem.