Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: dougjn who wrote (6944)	10/5/1998 2:22:00 PM
From: Ron Bower	Respond to of 9980

Doug, I hadn't factored in possible loans to hedge funds and the like, but considering bank exposure to unsecured consumer debt (primarily credit cards), highly leveraged mortgage loans, brokerage loans, overleveraged corporate loans, and agriculture loans, I don't feel the US banking sector is in a condition to withstand a recession. The '90s have been a period of corporate expansion, mergers, and acquisitions. The acquisitions have been based on stock value at the time it took place. Most of these acquisitions will not be able to generate the funds to offset the cost. Banks have been involved in the funding of many of the acquisitions. I believe US bank NPLs will be increasing and that the US banking sector will be having some serious problems. I just seems to me that the Fed was looking at the stock market rather than economic projections when making decisions. I don't know if a gradual lowering of rates 9 months ago would have made a difference, but it might have slowed some of the capital flow from emerging markets and weakened the $US. It also could have forced Japan to revise it's thoughts of exporting it's way out of trouble. It seems to me the US is reacting rather than taking preventive measures on both global and domestic economies. Also thinking out loud, Ron