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To: MeDroogies who wrote (22615)	1/18/1999 11:45:00 AM
From: soup	Respond to of 213173

OT - EMERGING MARKETS-Brazil cheer masks wariness. via Reuters By Gill Tudor LONDON, Jan 18 (Reuters) - The toppling of the latest currency skittle in Brazil has left global markets in a strangely chirpy mood. Far from touching off fresh emerging market panic and wider turmoil, as conventional wisdom had been predicting for months, Brazil's decision to bite the bullet of devaluation has lifted markets around the globe. But euphoria should not obscure the hurdles Brazil still faces on the way to financial health, analysts warned on Monday. ''It's remarkable just how quickly these markets have bounced back,'' said Philip Poole, head of emerging market research at ING Barings in London. ''One has to wonder to what extent the longer term implications of the devaluation for growth, inflation and debt servicing have been taken into account.'' Brazil's Central Bank confirmed on Monday what it had effectively allowed on Friday, saying the real would float freely subject to intervention aimed at curbing volatility. The real slid on the news before stabilising around 1.50 to the dollar -- a total fall of about 19 percent since before Brazil's failed partial devaluation last Wednesday. But Brazil's key Bovespa share index surged ahead, adding to Friday's 33 percent gain, and most other world markets continued to be buoyed by the newly positive mood. Analysts say there are good reasons why the floating of the real is less scary for world markets than earlier devaluations, from Mexico in 1994 to Thailand in 1997 and Russia in 1998, each of which sparked a tidal wave of anti-emerging market sentiment. First, the shake-out of highly speculative, leveraged positions after last year's Russian crisis changed the market. ''The kind of investors who were long Russia were different from the kind of investors who were long Brazil,'' Poole said. ''In Russia they were highly geared speculative investors who were forced to sell other assets, and contagion spread quite rapidly. That type of player was squeezed out post-Russia.'' Second, markets are happy that Brazil did not squander its still substantial foreign reserves of around $40 billion defending a currency which players saw as doomed to fall, keeping plenty in hand for debt servicing. ''Markets are relieved they didn't try to battle it out,'' said Rob Hayward, economic adviser at BankAmerica in London. Third, unlike the Mexican or Thai devaluations, the move did not come as a bolt from the blue. ''This was an event which had been greatly discounted in advance -- not only discounted, but the market forced it to happen,'' said James Graham-Maw, global portfolio manager at Foreign & Colonial Emerging Markets in London. ''The float was the only way in which the market's concerns could be addressed on a sustainable basis, hence the very rapid U-turn in sentiment.'' In addition, fears that a Brazilian financial collapse would hit the U.S. economy hard at a time of slowing growth appear to have been offset by optimism that the devaluation could allow Brazil to cut interest rates and ultimately boost its economy. And in terms of contagion, analysts say most other emerging market currencies have already been hit by the Asian and Russian crises and are now at less vulnerable levels. ''The markets are beginning to run out of targets, which is salutary,'' Graham-Maw said. Nevertheless, there is little room for complacency. Concern remains that the devaluation automatically increases the cost of servicing Brazil's external debt, and that it could again fan the flames of inflation which the previous currency system had been so successful in damping down. Analysts say Brazil will now have to work even harder to tighten its fiscal belt, yet uncertainty persists on getting key austerity measures through the country's skittish Congress. ''It's not our view that the contagion is finished,'' ING Barings' Poole said. ''Sentiment is extremely fickle at the moment and it wouldn't take much to turn things around again.'' ------------------------------ IMO, important commentary on world markets in general.

To: MeDroogies who wrote (22615)	1/18/1999 3:09:00 PM
From: Richard Habib	Read Replies (2) \| Respond to of 213173

So your friends have told you Apple may be in talks to buy SGI. You seem to think that's a good idea. I suppose your aware that since SGI is about 1/2 the size of AAPL, ballpark dilution of the stock together with the wariness of the street in joining two companies with such different cultures would likely drop AAPL stock to 32 or so. Second, I've been trying to see where the synergy is. Since SGI's products are based on a different processor and OS, I don't see where COG or R&D expenses would decrease although I suppose there would be savings in general admin expenses. It's possible SGI could adapt OS X for their workstations and Servers, abandoning IRIX - that might result in some economies. I can't see SGI switching over from it's MIPs processors to PPC - IBM is a direct competitor of SGI and it's never a prudent idea to rely on your competitor as a major source of your processors. Of course haven't even mentioned the fact that switching over to PPC would completely change SGIs product line which doesn't sound very feasible to me. I'd be interested to know why your friends think this is a feasible deal. Rich

To: MeDroogies who wrote (22615)	1/19/1999 6:41:00 PM
From: BillHoo	Read Replies (1) \| Respond to of 213173

<<As for the low cost PCs...I think they will turn out to be not such a big deal.>> Actually, I think Intel will try their best to quash that as soon as possible! It cuts into their anticipated sales of high-end processors and they use -gasp!- AMD or other non-intel processors! They can try to approach the market by further stripping down the Pentium and Pentium II line to lower cost. However, that again cuts into their margin. This is a price-war that can only damage the entire computer industry. Look at the airlines h=after the price wars of the 80s. Used to be a hundred dollars could take you anywhere in the world. Then they started taking away things like in-flight meals and those nice hickory smoked almonds. We'll see the same thing in PCs. They'll take away power cables or such! -Bill_H