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.

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

To: Henry Volquardsen who wrote (749)	1/18/1999 1:13:00 PM
From: Worswick	Read Replies (2) \| Respond to of 2794

I have this terrible feeling about last week and the truly amazing things that happened centered on Brazil. I am absolutely stuffed with disquiet. Is this really happening? Could life be this great??? For the first time in my 25 years of reading the Barron's Roundatable all the hypsters on that absolutely corrupt foruum were almost unanimously a-gawk at what is happening in the market. They were literally without words in describing the events of the last three months.... At these moments, of intellectural disquiet and doubt, I usually log on to Flekenstein and get a jolt of inspiration and reality along with the cold water. For Private Use Only William Fleckenstein "Greg Weldon on Brazil... Sometimes I share with readers ideas from services that I take, and I often get faxes about how to get them. They generally are services that I pay for and people don't have web sites, etc. Today I'd like to share a couple of thoughts from Greg Weldon from Weldon's Money Monitor concerning what the problems in Brazil mean and how to put it into perspective. "Our comment has been and will be that Brazil is the same as Russia in one critical aspect of its financial situation. Simply put... "the finger is NOT as large as the hole in the dike." In other words, the numbers just DO NOT add up. The Brazil of 1999 is to America, what 1997 Thailand and 1998 Korea were to Asia. If so, the natural progression would hit domino currencies in Chile, Mexico, Venezuela... etc., all major commodity producing countries, with particularly heavy exports of silver, crude oil and copper. We repeat our assessment. The dam has sprung a leak, and the magic finger made of money is simply NOT big enough to plug the hole. The dam will burst, and devaluations will flood the region. Not only is America in jeopardy, but Asia could be back in the headlines should India or China wobble. "The Brazilian devaluation could not have been more poorly timed from the perspective of China. The investment trust in the Guangdong Province (GITIC) was allowed to fail this week, and while not a complete shock, it nonetheless fosters anxiety related to the macro-theme of debt inflation and credit contraction. Talk has already emanated from U.S. banks regarding reluctance to lend to Chinese institutions previously viewed as "quasi-governmental." Simultaneously, government figures released this week revealed that the volume of global trade with China declined in 1998, the first such decline in 15 years." Wise words from Joanie... I don't mean to quote Joanie McCullough every day, but she's been on such a roll about this situation that I can't resist: "Now what should really get your goat is the ability of official-types involved in these scams to be able to switch from chicken little attire to priestly robes when faced with implosion of the latest scheme. Before the dough was sent in, they tried to frighten us with the specter of impending disaster, but now after having wasted yet more funds, they have the crust to hit us with comments like "full confidence in their resolve to move forward with reforms," "working closely with the G-7 and the IMF," "situation has stabilized," etc., etc., ad nauseam. Hopefully, our "Boy" has cried "Wolf" for the last time. These two have put all of this in perspective pretty succinctly and I think it's worth repeating so people understand what's really going on. Bulls prepare for Nirvana... If you take all of these events to their logical conclusion, the most bullish thing of all would be this: We've already had the bubble blow up Asia, Russia and South America, so we just need to figure out a way to blow up America and Europe. Then the Fed could take rates to zero, the stock market could trade at some big number like 50,000 on the Dow, and every American could be a millionaire, quit his or her job, and sit home all day and trade Internet stocks. We finally would have reached Nirvana - this would be the true meaning of heaven on earth. I guess that's what the bulls have in mind for what happens next, because certainly economic fundamentals have zero to do with anything these days.