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

To: Ramsey Su who wrote (7189)	10/17/1998 12:05:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 9980

Ramsey, at any point in time we can always put on the table all the "good news" and all the "bad news". As Carl Marx observed in the last century, a capitalistic system has cyclical tendencies (money flows to highest returns, and when too much money has gone there, they find to their surprise that overcapacity, excess inventories, exhaustion of demand and few other miseries, have caused these investments to be for nault). Greenspan, I believe, had to wait until the "last moment" to act otherwise, if he acted earlier, he would have exacerbated the problems of too much money going into financial assets. The fact of the matter is that inflation is "relatively" tame, on the verge of becoming a deflation (which is much worse then inflation), and to counter such possible deflation Greenspan is now stimulating. As for Asia, you are better situated than I am to understand the trends, but from the behavior of the markets, it seems to slowly stabilize. It is no longer on a path of extremely rapid growth which will bring about rapid expansion of the "world middle class" of consumers, and thus my less then exuberant view on the next five years, but that can change again. It is however, an element on which Greenspan has no control and he has to do what he has to do to isolate us from the big cyclical fluctuations in those yet "immature" capitalistic systems (were apparently, Marx' observations still hold). Zeev

To: Ramsey Su who wrote (7189)	10/17/1998 1:01:00 PM
From: Ron Bower	Read Replies (1) \| Respond to of 9980

Ramsey, I fail to understand why you would include China because of GITIC. The publicity is due to surprise at the Central government letting it fail. It's a minor economic event of $2.2B in debt spread all over the place (even $100M in Switzerland) and, while the reported 80% debt/equity is probably understated, the end losses will be minimal. There may be more failures, but even those will not have a major economic impact. The government's position will make investors more conservative. As Zhu stated, ""After closing down those unsound enterprises, the financial market will become healthier, won't it?" FWIW, Ron