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

To: tom who wrote (2163)	8/28/1998 12:18:00 PM
From: Frodo Baxter	Read Replies (3) \| Respond to of 2951

>HK borrowers would still need to pay a big premium to borrow in US$. Oh really? How much of the premium do you figure is the devaluation premium and how much is the risk premium? This point is crucial for all the titans committing billions, no? You know, when I first saw HK's foray into the market, I thought it was kinda silly but they'll pull back and everything will return to some form of normalcy. But now, geez! The Hang Seng's market cap is only around $200 billion. If the govt spends all its money, they can own half. Now, here's where this MIGHT get interesting. What % of the market is short right now? Probably 100% (maybe more...) So what happens when the govt looks like they can't buy any more and the speculators are just about to declare victory? What if the HKMA asks for delivery of their shares, forcing a buy-in? That's right, every short's nightmare. SHORT SQUEEZE.