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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Simon Nadezhdin who wrote (6597)	9/17/1998 10:32:00 PM
From: Tunica Albuginea	Read Replies (1) \| Respond to of 18016

Simon, to some degree Canada will get a dose of the enema, whose prescription in essence reads, " thou shall pay your giant credit card debt [ read, Medicare spending (borrowed from young folks, children and grandchildren and the unborn included ); includes budget deficits, welfare, loans to Russia, the works ]; now; pay, now. Or, " your time is up ". We don't trust big daddy anymore to take care of us. The good thing about Canada though is that Canada has for the past 2? years, with the Harris Government and the Western provinces, started already to implement a solution of cutting debt and spending. Something that the rest of the world, US excluded, is only just starting. In fact most countries haven't even started. So the hedge funds are taking their cash away like bandits and running. The speculators are smelling blood and selling the currencies short and further devaluing their value and collapsing International Trade. This is unlike previous collapses a la Mexico, were the IMF had to deal with a single country thus it was easier. All this is happening now at the same time. All countries, all together now, : " your debt is due. Unfortunately the IMF or the US aren't big enough to bail these folks out even if they wanted to. So we are all helpless now and have no choice but to patiently watch the house of cards built on feckless credit borrowing without adequate collateral collapse. Large part of this debt is built on leveraged deals based on inflated stock values ( read Ciena, Tellabs ) . As the value of the stock-currency collapses, so go the financial underpinnings of the deal and you have to liquidate. We'll have to liquidate large amounts of property ( Japanese property especially ), stocks at inflated PEs, and so on and so forth. At some point in time the little guy will panic; we'll all panic, from the little guy on up. And we'll sell because we are in panic or because we got a margin call or some similar reason. One big blow out. 10 years of " the collar system " which has kept the Naz and Dow from having a good periodic cleansing out BM. It took the building of a giant stockpile with Dow at 9000 and PE 50, to make it precarious enough so that it won't take much now to collapse. And unfortunately we have more than a little. Asia collapse, 1/3 of the world economy: that's a 30% profit shortfall, gg. The President smoking cigars in the wrong resting hole while talking to a congressman about shutting the Government 2 years ago; certainly, " not a well thought out decision under the circumstances ". Well you get the idea. To answer your question, I think Canada will be more affected by the decline of commodity prices.But I think Canada will come out of this in reasonable shape, TA