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Strategies & Market Trends : New US Economy Policy -- Ignore unavailable to you. Want to Upgrade?

To: Arthur Tang who wrote (160)	5/27/1998 11:14:00 AM
From: Arthur Tang	Read Replies (1) \| Respond to of 435

The new economy and the global stock markets? Every once in a while, stock markets around the world started to pull back on the same day. What gives? Wall street and the new economy has something to do with it. For many years since the crash in 1987, the stock market was left to professionals in the mutual fund business. They pick cherries and invested around the world. What they did was to spread American money around the world. So, when they fear the economy, local or global; they take profit and crash the markets. They can take all the cash from any market and start crashes around the continents. No one knows better that America is the largest economy. Europe and Asia have relatively small economy and even smaller free cash pools. Any investors' worst fear is illiquid investments. When the global markets expand (indexes go up); they attract American money. When mutual funds withdraw from any market, they can crash the market. In 1994, even Templeton funds had to be sold to Franklin funds due to illiquid markets they invested in. And the world situation has not changed much. Cherries may be sweeter in the rest of the world; Wall street is still the most liquid market. And the most liquid market is still only at most 8% cash, 92% instruments. Moving funds around the world also suffers the currency risks. Better bring the money home? Citibank's withdrawal from Germany, started the second world war. Still, beware of risks and promote American business is a better choice. At least it benefits the land you live in.