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

To: tom who wrote (2287)	9/2/1998 12:58:00 PM
From: Bosco	Respond to of 2951

Dear tom - yes, intervention is too broad a term. I see HKMA action is in the mid range between the Fed of 87 and Malaysia. Obviously, while HK has been in a speculative bubble [i.e., 50% correction is long overdue,] I don't know where is the bottom. So, I don't know what is the inevitable. However, assuming HKI is 7,000 [between 6,500 and 7,500] it is at 94 or so level. Granted that 4.8% unemployment is highest in her recent history, we ve to ask, is the region worth less than 5 years ago? Speaking of equilibrum, where is this equilibrum? I suppose one can say 1:1 between buying and selling. So, the argument goes, HKMA should back off. However, to achieve true equilibrum, both HKMA and hedgers should back off. There is no way one can get around this. The argument about HK equities have been falling before the advent of the hedgers is really fallacious since the HKI level was certainly at different level and thus provides no clue as to where the true equilibrum is [personally, I tend to think there is no such an ideal state of equilibrum. Rather, the pendulum swings both ways. However, there are ways to limit the extremes, like Chairman Greenspan's famous "irrational exuberance," not that it was he goal to manipulate the sentiment index of the market <VBG>. best, Bosco