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To: stock bull who wrote (72832)	10/18/1998 7:53:00 PM
From: Mohan Marette	Respond to of 176387

Asia-Is the worst over? 'The good news is that you can only panic once'. stock bull: I see very encouraging signs coming out of S.E.Asian countries and Japan,I am not saying the crisis is over by any means but many of the countries might have reached the bottom of the pit and if not they seem to be very close to the bottom.Now the process of climbing out of the pit and reaching ground level may take a few more quarters but the bleeding might have stopped to a great extent.This is what I gather from these news reports of late and I do realize I could be wrong. Now what this means to DELL:- We all know Dell grew their business some 34% (in Q2) while PC sales went down some 9% in the region,now imagine what could happen if the PC market stabilizes and there is no further decline in the industry and go a step further and see what the result will be for DELL if and when the PC market gradually recovers and records marginal gain.Well you get the idea and should know where I am going with it.<g> Now here is another article I have managed to mine out which further corroborates what I have posted earlier.Also you will see a URL for a report on Asia by Lehman Brothers that came out on the Oct.16th. ========================================== courtesy:Austin American Statesman Worst may be over in Asia, leaders say By Mark Magnier Los Angeles Times Posted: Oct. 18, 1998 SINGAPORE -- Asia, which gave birth to the 15-month-old economic crisis that has circled the globe, has in the past few weeks showed encouraging signs that the worst may be over, according to Asian government, financial and corporate leaders. They quickly add that recovery will take years and that the region remains vulnerable to unexpected new external shocks. Moreover, progress is uneven from country to country, and real economic growth is still a few quarters away. Yet stabilizing Asian currencies and stock prices, declining interest rates, and increased political resolve in Japan and elsewhere have contributed to growing optimism that the region has completed its headlong rush to the bottom. "Asia's outlook is improved," said Duck-soo Han, Korea's trade minister, agreeing with others that the worst appears to be over. A bottoming out in Asia would not halt the ripple effects of the region's crisis that have spread to Russia and Latin America and begun to cause problems in the U.S. economy. The dynamics unleashed by the events in Asia, such as the drastic shrinkage of markets for U.S. goods, will play themselves out for many months. But a halt to Asia's decline would be an enormous tonic for world markets searching for signs that the frightening "Asian contagion" won't go on forever. "I think it's going to be a long, hard road," said Brian C. Lippy, managing director of Tokai Asia Ltd., a hedge fund backed by Japanese capital. "But there's now some cautious optimism." One key recent change in the landscape, said representatives at an Asian meeting of the World Economic Forum here last week, is an emerging Asian consensus on some tough steps needed to fix the underlying problems. The cornerstone is a recognition that public funds must be used to bail out bleeding banks, as politically unpalatable as this may be, and stimulate the economy. Thailand, Malaysia, South Korea and most recently Japan have all climbed on board or are poised to use central bank funds or state budgets to prop up bank balance sheets. The most dramatic such step has been last week's enactment of bank reform legislation and a beefed-up bailout in Japan after months of political paralysis, wrangling and false starts. "It appears (Japan has) picked up the ball," said John Ross, Asia-Pacific chief executive with Deutsche Bank Group. "Now let's hope they continue to take it down court." The importance of an engaged Japan can hardly be overstated. Japan's economy is twice the size of all other East Asian economies combined, China included. And its financial, manufacturing and trade tentacles extend across the region, with the Malaysian, Thai, Indonesian, Singaporean and Chinese economies heavily dependent on Japanese factories producing everything from cars and televisions to VCRs and household appliances. A second cause for the recent guarded optimism has been improvements in several key market indicators. The worst of the region's capital flight -- the phenomenon that triggered all the trouble in July 1997 -- appears to be over, analysts say. "The good news is . . . you can only panic once," said Jeffrey Sachs, director of the Harvard Institute for International Development. "The short-term debt situation has stabilized in most countries." Regional currencies have by and large stabilized, a necessary precursor to reform and the eventual return of domestic economic growth. And the sky-high interest rates needed to anchor those currencies are coming down now that the worst of the currency threat appears over. Short-term Korean rates are now stable at 7 percent compared with around 25 percent last December, while interest rates in Thailand have dropped by four percentage points in the past few weeks to a prime rate of about 14.5 percent. Foreign currency reserves are also rising sharply in several countries -- to $44 billion in Korea from $3.8 billion late last year. The statistics suggest companies could face less pressure to lay people off, postpone investments and contract their operations. A third major change has been a growing U.S. and European commitment to take the crisis seriously, view it in a global context and attempt some solutions. Spurred by the almost simultaneous collapse of Wall Street and Russia in late summer, both regions have moved to keep their respective domestic growth rates on track -- an essential step to avoid a global recession and ensure that Asia has some markets for its exports. The U.S. Federal Reserve cut interest rates by 25 basis points earlier this month and again on Thursday and the central banks of Spain, England and Canada followed suit. Germany's new government is also seen as far more amenable to rate cuts than its predecessor. The U.S. Congress approved $18 billion for the IMF in the budget compromise reached Thursday. =========== Lehman Brothers-Asian Economic Comment daily update- Oct.16,98 lehman.com