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

To: Paul Berliner who wrote (5707)	8/20/1998 6:08:00 PM
From: Frodo Baxter	Read Replies (1) \| Respond to of 9980

>Let's get one thing straight Mr. Kam. No one is making up #'s. I read as much as I can and the 20% HK reserve depletion figure is from bridge news, reported in the middle of last week. Here's where you're being mislead: The exact total of foreign reserves that HK has is $US160B. That's exact. You're a blast. Provide one hyperlink that says that HK ate 20% of their reserves. You can't do it. It didn't happen. But of course, you can't help yourself. Now I have to disabuse of you two silly notions. #1) The HKMA did not piss off 20% of their reserves. It's always been around $100 bil. info.gov.hk #2) HK never had $160 bil of reserves. So I was scratching my head wondering from which orifice you pulled that number out of. I clicked on your profile looking for a clue, but all I found there was a link to America Free Radio. Finally, you provided the answer, by providing a link from which your opinions seem suspiciously derivative of: afr.com.au Oh wait a minute. That's an Australian web site. So I converted $160 bil koalas to good old greenbacks. Want to guess what number I got? In any case, you continue on with an incredibly naive circumlocution about how hedge funds have basically unlimited credit to break the HK bank. Nice try junior. Venally or ignorantly, you forget that credit comes at a price, interest. So what happens is that selling HK$ drives up interest rates, which makes the currency more attractive to other buyers, usually also hedge funds. Currency boards are actually quite beautiful systems in their simplicity, symmetry, and effectiveness. But I'm sure you're not convinced. Fine. Why don't you short me the HK dollar equivalent of $5000? I'll let you off the hook when you get tired of paying me 12% per annum. Should the HKMA buy the Hang Seng to prop it up? Should the Fed buy Yen to prop it up? If you're a purist, you say never, never. But in real world, it happens. Even so, it's a drop in the bucket.

To: Paul Berliner who wrote (5707)	8/20/1998 11:21:00 PM
From: Dayuhan	Respond to of 9980

Paul, You said that the Philippine currency/economic crisis of around two years ago was the first sign of collapse caused by the Japanese economic mess. I said, and still say, there was no such thing. The peso's jump from 26 to 35 happened, as I said, during the Gulf crisis, which was much more than two years ago and had nothing to do with the Japanese problems. The currency recovered back to the 26-28 range as soon as the crisis was over and remained there until July '97. The crisis was largely emotional, and when it became clear that the Gulf War was not going to have a major impact, things recovered quickly. No major bank problems, no big companies went under, no real economic crisis. Certainly none two years ago. So far Estrada's economic policy seems to be limited to grumbling about the mess he was bequeathed. His key appointments won general approval from the business community, but no clear policy direction has emerged. Much to be reconciled between the desires of the advisers and Estrada's need to make visible moves toward his much discussed "pro-poor" agenda. I didn't vote for him, or anyone else, not being a citizen. He's not who I'd have chosen, but it's who we've got, so we watch and wait. Not exactly in breathless anticipation. Steve