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Strategies & Market Trends : HONG KONG -- Ignore unavailable to you. Want to Upgrade?

To: Ron Bower who wrote (1631)	5/18/1998 10:11:00 AM
From: MikeM54321	Read Replies (1) \| Respond to of 2951

>>Wouldn't a devaluation of the Rmb prevent this? Do you feel that emotions are controlling the market activity rather than fundamentals?<< Ron, On the first question, yes and no. A devaluation would hurt temporarily, but in the longer run, it would help. Cheaper priced exports (becaue of weaker currency), makes China more competitive with Asian Tigers and makes it more attractive for US to buy more product. Look at Japan as an excellent example. Even though their currency is weaker, there exports are considerably higher to more than make up for the exchange rate. But of course the above scenario isn't taking into account all the ramifications (emotional) of China devaluing. Now as far as emotions, answer is (IMHO) a resounding "yes!" I learned the hard way not to let logic dictate my investment decisions. Emotions are a driver of economics and markets. As a matter of fact, Soros's latest book, "Soros on Soros" says this in a very roundabout way. He tries to make it a science. Just think how much US domestic consumption is a percentage of our own GDP. It's around 70%! If Americans were suddenly to lose confidence in their economic well-being, there would be a major pullback in spending. The exact spending that dominates our GDP. I very rarely now try to make any judgements based on facts. It's too hard to do, and emotions or perception usually wins anyway. I could give examples but this post would be too long! By the way, I found a lot's of interesting articles recently. I wish I had more time to post them and hear everyone's comments. A lot were saying the same thing this article did. I'm not debating their accuracy. I'm just concerned there are so many. Thanks for your views, MikeM(From Florida)

To: Ron Bower who wrote (1631)	5/19/1998 10:16:00 AM
From: Stitch	Read Replies (2) \| Respond to of 2951

Ron, <<It just seems to me that the 'panic' is the cause rather than the result. Reaction to articles like the one you posted.>> This is chicken & egg riddle that I suspect we will never solve but you touch on a very interesting subject that has puzzled many over the years. The nature of markets, and how they behave, and what they react to is what I refer to. I suspect trying to figure it out gets harder and harder in this age of instantaneous news. Best, Stitch