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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: don pagach who wrote (4324)	6/9/1998 11:02:00 PM
From: Stitch	Read Replies (2) \| Respond to of 9980

Don, Thanks for the articles. I agree that Asia problems are seeing more financial press. Not surprising, in the wake of a sucker's rally and a emergence of more clear signals as to the depths of the problems. Also understandable given the comments we are seeing in the earnings warnings Mike has documented so well. You asked what others think so here is my 2 ringiit (soon to be worth 2 cents). I agree with Gimbel's comments: In his view, the peg would only be broken with a simultaneous devaluation of the Chinese yuan, which he also doubts will happen. Further, lowering the value of the HK currency (which recently traded at 7.749 to the U.S. dollar) by, say, 20% "logically shouldn't necessarily trigger another round of competitive devaluations in the region." Why? The domestic financial picture in Thailand, Indonesia and Korea, for example, "is so bad that further devaluations won't make their economies any better." In fact I said as much Sunday. Simply put there is little to gain from a devaluation and much to lose. Here are my comments Sunday on the HK thread: "For the record I agree with Ron that China will avoid devaluation for the simple reason it will not yield them any major gains while holding steady will yield much. I totally agree with the notion that economic leadership in the region is the golden ring they pursue. This isn't just about joining the WTO. This is about replacing Japan as the leading economy in the region and one of the leading in the world. Putting that in the context of just a few years ago is quite remarkable. Or go a bit further back to Mao's "Great Leap Forward" and it is flabbergasting." However, also from the same article which I wholly agree with: On the other hand, do central bankers and politicians ever make stupid mistakes? You bet they do. Best, Stitch