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Non-Tech : Derivatives: Darth Vader's Revenge -- Ignore unavailable to you. Want to Upgrade?

To: Worswick who wrote (204)	9/27/1998 7:07:00 AM
From: Tom	Read Replies (1) \| Respond to of 2794

Clark, Thank you. I'm not familiar w/ Mr. Faber's views on the derivatives markets, but I'm aware he submitted a gloomy forecast for both Hong Kong and China. Also that he supports Shanghai overtaking Hong Kong, and is pessimistic about East Asia in general. Just what his reasoning is for being a pessimist on East Asia, I could only guess. May be that he numbers among those of us who believe in collapse and rebuild, rather than bailout and oppress. Faber's abundance of expertise on historical and economic precedents makes for some solid foresight. That's for certain. I understand his presentations can really rivet an audience's attention. There are, however, some issues that I consider important which he may have dismissed. (Does he still have a pony tail?) The looming and more immediate threat to Hong Kong, I believe, is Taiwan. Taipei and Beijing are in formal negotiations once more. Though the most I would hope for from this go-round is unrestricted trade between the island and the mainland. Progress in that aspect would eventually take some of the gusto out of Hong Kong. Faber has stated that Hong Kong will one day be just another city in China, and makes correlation w/ Austria's confiscation of the goodies from Salzburg. But all about Hong Kong is the coastal beehive of Guangdong, which, in a prosperous China, will not be just another province. At least not in my lifetime. The provincial party boss in Guangdong is an up 'n' comer. The other element threatening Hong Kong is Singapore. And I just can't see that Shanghai has its act together yet. Not from what I can see. The mayor is another up 'n' comer, and presents himself in a friendly and knowledgeable fashion. But I have to wonder when I read, on his returning from Cuba, his statement that "Castro. Now there's a man who knows how to run a communist system." Too, that a significant amount of monies that flowed into Shanghai in recent years have disappeared into the black hole of greed and corruption. Some would argue that substantial investment is still coming to Shanghai, but I feel that some of the missing monies were foundational. One reason why FDI is the most important figure among the Mainland's many economic indicators. And can I yet purchase shares in the best-run Shanghai conglomerate? I don't believe so. Save the best, market the rest. China will obviously, however, continue to develop the Northeast as best it can. If for no other reason than what suspicions they have of Japan. As far as Faber making a case for China having "one foot in the grave," I picture it more like slipping on the edge and landing on their butt, sitting, one leg in and the other out. To stand again, do they make an attempt at swinging the one leg out and risk falling in backwards? Or do they just opt to whip that other leg around and land in the hole upright, on their feet? (Remember, no hands!) Well, they won't just sit there. That much is certain. The current advantage for the individual investor is share pricing and the opportunity to pick-up a piece of Future China on the cheap. South Asia and eastward I have never concentrated on. Any commenting on the entire of Asia would be better left to you, Clark, and others. To avoid using the Off Topic declaration... Re: LTCM I couldn't help but give a smirk on seeing a report that tells how surprised the exec's from Merrill, Travelers, et al were upon entering the urgent session last week and finding that their counterparts were also clients of the fund. Who extended the credit to LTCM? Crony capitalism, American style?