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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: Shakush who wrote (12803)	1/18/1998 12:54:00 AM
From: Jess Beltz	Read Replies (2) \| Respond to of 25960

Duane, nice to hear from you brother. In answer to your question, the social unrest is a reality already. The Suarto government has real problems: (1) The government is totally corrupt. Suarto's personal family memebers have been given extraordianry breaks (particular tax exemptions) for years which have created a great deal of resentment. Part of the recently announced reforms involve his family giving up these priviliges. (2) There's the ongoing festering situation involving East Timor, which the Indonesian government raped some years ago and which has fostered its own insurgency movement, and now (3) There's the economic catastrophe which has rocked the country. The rupiah has lost something like 2/3 of its value in the last 4 months. According to the just-released revised economic forecast for the next year, real growth in GNP/GDP is now expected to be ZERO, and more importantly, inflation is now forecast to be 20%! It is this last number which has everbody frightened, and frankly, the government estimate may still be on the low side. When you combine the ongoing loss in value of the currency (which makes foreign products continually more expensive) with a 20% or more increase in own prices, these people are watching their buying power be anhilated fast! The IMF's bailout notwithstanding, I think most people around here think it's a toss-up whether or not the present government will survive the storm even if Suarto's health remains in tact. If he dies, the odds worsen dramatically. Again, I don't worry so much about the Indonesian economy per se, but rather the ripple effect it will have on all of the Eastern Banking Houses with big investments there, particularly loans. I see a lot of property development related bankruptcies looming there, and I wonder where the money for it came from. More interesting to me at the present is what will happen in Thailand. The King there is asking for more austerity measures, which almost always invloves further cuts in spending on governemt programs, particularly to the poor, and in increased taxes. This at a time when the Thai people have nothing left to give. They love their King, but there are limits. Finally, let me say one thing that I've said before and which may indicate why I feel there's a lot moer trouble in store. That is that these countries do NOT want transparancy and efficient markets. They want this particular economic crisis to go away so they can continue to do business the way they've always done it, through bribes and connections with plenty of government protection from foreign competition. Furthermore, the great irony here is that the socialists are starting to make some headway here by saying "look what free markets got you, economic disaster" when in fact the markets were never anything close to free market economies, and that was the real problem to begin with! That's my sermon for this Sunday. jess.