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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Robert Douglas who wrote (580)	9/4/1998 1:35:00 PM
From: Henry Volquardsen	Read Replies (1) \| Respond to of 3536

Robert, The rumours about what may be in the wings this weekend are in fact bullish on the Asian currencies and therefore bearish on the dollar. I was perhaps to cryptic with my comment about the specs but that was what I was hinting at. I don't want to be specific as I have heard little definite and lots of rumour. But you can put me down as cautiously short term bearish on the dollar. I may not have vocalized this but I have been short term bearish on the dollar vs yen since the specs started getting pounded in Russia. I posted a comment a while ago about how they had been funding convergence trades with yen borrowings and how the unwinds would temporarily weaken the dollar. So I guess you can ease up on Lind-Waldock ;) Re your comments regarding the BoP flows we have been discussing. It is worth noting that we still do run a large surplus on services. Henry

To: Robert Douglas who wrote (580)	9/4/1998 1:40:00 PM
From: Paul Berliner	Read Replies (1) \| Respond to of 3536

Robert, you were shorting yen futures in '95 and took a bet with me that neither Argentina, HK or Taiwan would devalue? I can't fathom this. If you've been playing currencies then I'm sure you've heard of billionaire trader Joseph Lewis. He's also expecting HK and ARG to fall. You are truly a maverick in this pastime! How refreshing! Anyway, maybe I should have been more specific in my previous post on the trade imbalance. What I mean is that the U.S. can never again export near what it imports. Example: Congressman Mentalcase bitches that our trade deficit with Japan has grown enormously. I retort: Forevermore the volume will balloon because they simply aren't as ravenous a consumer nation as we are, and they never will be. Simple as that. That's why I say new textbooks have to be written because economists didn't consider these possibilities years ago. The U.S. is dependent on the outside world primarily for oil, while the outside world is dependent on the U.S. for a plethora of other goods. And the fact that the price of oil has been halved is irrelavent - we were in a trade imbalance when it was $25/Bbl., too. The global 'hot money' infusion and your projected diffusion of it is hardly a factor, in my opinion - I still believe domestically demanded services are the buoy. Should the economy recess, our trading partners will too, and the imbalance will thus live on. P.S, add Brazil to my list - Columbia devalued because the coffee growers specifically asked the Col. Gov. to do so, as coffee prices have fallen sharply this year. And who's the 2nd biggest coffee producer? Brazil. Just another thing for Cardoso to worry about (aside from a ton of ST debt due in Oct.)