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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Ian@SI who wrote (6819)	8/29/1998 4:11:00 PM
From: Ian@SI	Respond to of 10921

... and an Alan Abelson quote of Barton Biggs that I felt was worth sharing... ... In his latest commentary, Barton Biggs recalls the "diaper indicator" devised by technician John Mendelson some years ago. In its crudest form, Barton explains, "the theory was that the time to buy was when investors were so scared they were wetting their pants." ...

To: Ian@SI who wrote (6819)	8/29/1998 4:30:00 PM
From: Katherine Derbyshire	Read Replies (2) \| Respond to of 10921

Also in Barron's, an excellent interview with Marc Faber on deflation and the emerging markets crisis. Excerpt: Q: It [Asia] certainly seems to be blowing an ill wind in our direction. Isn't some massive pump-priming in order? A: The right medicine for the emerging countries would be to try to stabilize their domestic economies as quickly as possible. I don't think this can be achieved necessarily by lending them more money, because as you lend them more money, their debt-to-GDP ratios rise and their credit ratings deteriorate -- and the yield spreads on their borrowings over U.S. Treasuries increase. In other words, the emerging world's problem is that they have too much capacity and are faced with an economic slump. They have depreciating currencies. What they export -- mainly raw materials, T-shirts, Nike shoes, garments, electronic components -- are all deflating in price. At the same time, the interest rates on their borrowings, especially foreign borrowings, are going through the roof. So they are faced with unbelievably high real interest rates that are, in my opinion, totally unsustainable. These rates are a recipe for aggravating the economic crisis and pushing these countries down the drain far further than necessary [see chart]. The best medicine would be for the Western world to accept the fact that you have to give them breathing space. Let's say, six to nine months in which these countries wouldn't pay the interest on their debts; in which they could stabilize their domestic economies one way or the other. Otherwise, I see a problem similar to Germany's after World War I, where the reparation payments were just too burdensome, resulting in hyper-inflation and all its social consequences, including the rise of the Nazis. We have to be very careful that these emerging economies don't get out of hand, leading to widespread political and social disturbances. For subscribers, the full article is at interactive.wsj.com Katherine