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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Jess Beltz who wrote (4496)	1/19/1998 5:08:00 AM
From: GuinnessGuy	Read Replies (1) \| Respond to of 10921

Jess, -you wrote- "One thing that nobody has really talked about so far is the possibility that there is a lot of exposure to the Asia Crisis on the part of European Banks that may not yet have reported the damage to their balance sheets, but which may be revealed in the next quarter or two, perhaps with disasterous effects on the upcoming economic union." That and many others Asian 'things' have been or are being discussed in the 'Asia Forum' here in SI. With your first-hand knowledge and interest in the region I'm surprised that I haven't seen you over there. If you're interested, there is a very lively discussion that begs for your insights: Subject 18599 Craig

To: Jess Beltz who wrote (4496)	1/19/1998 9:31:00 AM
From: Mason Barge	Respond to of 10921

Thanks for the onsight analysis, Jess. I saw the big surge in Asian markets last night -- all of the little guys were up 5-10%. However, currency weakness continues, and the rupiah was way down again! We agree on the one probable prediction here - it's going to continue to show instability. One factor complicating US and IMF attitudes toward the region, especially Japan, is foreign policy towards China. China is now selling new-generation military systems, such as fighters and missiles, to Russia -- what a role reversal! It is now the only credible military threat to the US and could play absolute havoc with the world economy if it became more aggressive towards Taiwan. The US attitude towards Japan is very skewed by the need for a strong military ally, both as a source of bases and as a source of economic partnership for emerging countries. Also, Japan has put together a reasonably strong military (in technical violation of the WWII treaty -- shades of Weimar Germany!) I think this is why the US continues to accept Japanese protectionism and other corrupt financial practices, which would otherwise be sanctioned strongly.

To: Jess Beltz who wrote (4496)	1/19/1998 12:04:00 PM
From: Clarksterh	Respond to of 10921

Jess - OT I agree with you that China and Japan are the two biggest unknowns inre the chances of continued/worsening turmoil in Asia. However, there are some mitigating factors: Japan - It has limped along like this for 5 years now because it has huge foriegn currency reserves, and its debt is yen denomonated, not dollar denomonated as in much of the rest of Asia. Thus, it is not possible for it to get into the incredibly voratious death spiral that swallowed up Korea et al. However, it could get nibbled to death (lots of Perigrine's), or it could go into its own internal spiral (which although it would be less severe than the one experienced by Korea et al, would still be painful.) China - The main saving grace here is that it is still largely a command economy. For instance, the yuan is not fully tradable. And the government controls the banks almost completely, so it is difficult to imagine the same loss of confidence/run that happened in the rest of Asia. It is true that they cannot avoid other effects, such as high inefficiencies or high unemployment, but it always amazes me how long a situation like that can continue. It took the USSR decades to collapse. Clark

To: Jess Beltz who wrote (4496)	1/19/1998 12:10:00 PM
From: HB	Respond to of 10921

Jess, I'm in general agreement. But we may get a quarter or even two of a nice bounce, depending on factors which I'm not very certain about. I agree China is likely to be forced to devalue, but they probably can hold the line for awhile, and will try hard (making it more of a shock when it actually happens). First wave of currency shorting is being wound up, IMF infusions can shore things up short-term, valuation-based bounces underway in some Asian stock markets. That may keep a lid on things long enough to sustain further rally in the US market (unless Asian currencies bounce enough to cause US interest rates to rise significantly). If low interest environment continues, or rates drop further, perhaps a nice bounce, which could reignite tech mania & the semi cap equipment industry. Bad news minimized, etc...., especially as it will take time for the full effect to hit the bottom lines in semi equip. This is probably only relevant to those who are short-term minded with at least a portion of their portfolio. But I think it a real possibility, and we may not want to be fooled when it happens. Then, when the effects of IMF austerity programs kick in, the need for more funds by some countries becomes apparent, and some countries recalcitrance at following IMF directives becomes apparent, the other shoe will hit the fan in Asia, just when semi equipment is feeling maximum impact from the first wave of the crisis. A reasonably likely scenario, anyway. Howard