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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Lee Lichterman III who wrote (11974)	4/25/1999 3:00:00 PM
From: Casaubon	Read Replies (1) \| Respond to of 99985

Further weakness in Europe's single currency could call European monetary leaders into action. The Wall Street Journal reported Thursday that French Finance Minister Dominique Strauss-Kahn said further euro weakness would be undesirable, as it could make euro-region assets unattractive to investors. How come a weak yen props up the Japanese economy while a weak euro hinders a european recovery? Also, I have been going through many stock, searching for good investments, and the stocks which routinely come up as potential candidates are almost all in the software sector. Does anyone have any input regarding a recovery in that sector and the implications for the economy. At first glance, this would appear bullish to me, if this is indeed part of a sector rotation. Any and all opinions appreciated.

To: Lee Lichterman III who wrote (11974)	4/25/1999 3:23:00 PM
From: StockOperator	Respond to of 99985

L3, Thanks for your observation of the dollar. I also noticed the pattern and agree completely that something is going to give. My initial read of the chart is that the dollar may actually go HIGHER at least to retest the 102 to 105 level. A break above that would be major considering it would take out very long term resistance. The interesting point about that may be that small cap stocks generally perform much better with a rising dollar. Of course it could have the exact opposite affect on big cap stocks making their products more expensive to exports. I guess we will have to wait and see. Regards, SO

To: Lee Lichterman III who wrote (11974)	4/25/1999 5:42:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 99985

Lee, re: China: with regards to china's banking system, it is indeed weak. as there are no trustworthy official figures, i can only relay estimates, which say that up to 60% of outstanding loans may be duds(the source for this info is the economist). this is utterly believable, as china's banks are forced by the government to keep up shoddy lending practices in order to keep the giant money-losing state industries afloat.as i have pointed out in an earlier post, the chinese government's foremost priority is to avoid social upheaval,as this would threaten it's grip on power as well as the unity of china. this creates a sort of vicious cycle, as important and painful structural reforms are postponed in favor of muddling through. a devaluation of the yuan becomes ever likelier, now that the financial crisis has officially been laid to rest. china could well become pivotal in the continuation or otherwise of the renewed confidence in financial markets worldwide. regards, hb