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To: Yarek Szolomicki who wrote (6306)	9/1/1998 2:19:00 PM
From: Doug	Respond to of 18016

Yarek: In many countries political Office is a means to wealth. The Banking System here ,in Japan and Germany were responsible for lending their excess capital to many Countries on the basis of inflated co-lateral and unrealistic growth expectations. The official Agencies, the Bankers at both ends, the Management of the Receiving Companies and the Politicians in the receiving Countries had a great time.Patronage ,graft ,expense account write offs were rampant and all the players at the top on both sides knew about it and understood the game. In many cases after Companies were in full production, their Cash flows were still negative. Despite these early warnings, stocks in those markets were run up by inflating assets and anticipated earnings. Parabolic P/E's were first introduced in Asia. The small Investor and Foreign Mutual Funds were also lured in and the stock markets there were run up in a secondary wave. By now all the original players had their wealth slashed in Foreign Banks and deserted their markets. As markets collapsed, the common man lost his savings and Banks defaulted/closed. In the donor countries, the common man suffers indirectly as the Banks write off their Losses against Taxable Income. This is what happened . Is it not strange that in that part of the world the problem of devaluation is least in India. The reason is that they received the smallest amount of Loans relative to their GDP and have not bought into the "Global village" concept.