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Earl I couldn't agree with you more, nice post.
Robert
At 11:04 AM 9/11/98 -0600, Earl Adamy wrote:
>At the risk of upsetting the free marketers, I'm frankly somewhat pleased to
>see some of the central banks around the world (e.g. Hong Kong) putting the
>interests of their countries ahead of the hot money, hedge funds, and
>bankers who expect a bailout when their ill-considered loans go bad. I am
>not referring to countries (e.g. Indonesia) which support unbridled cronyism
>in financial matters. I think that the long term bottom line for responsible
>countries which take strong defensive action (preventing unreasonable flight
>from currency and equity markets), will be the ability of these countries to
>establish and maintain a sound economy. Bankers have short memories and will
>always lend where they think they can make money.
>
>Earl
>
>-----Original Message-----
>From: Timothy Morge <tmorge@xxxxxxxxxxxxxxx>
>To: alfredo.simas@xxxxxxx <alfredo.simas@xxxxxxx>
>Cc: omega-list@xxxxxxxxxx <omega-list@xxxxxxxxxx>
>Date: Friday, September 11, 1998 10:40 AM
>Subject: Re: Brazil!
>
>
>Alfredo:
>
>I wouldn't compare brazil with Russia. But as a very long-time currency
>trader,
>I've seen alot of central banks flex their might, and heard every country
>say
>that their box of tools would thwart speculators. The truth is, if a country
>wants the luxuries that capital flows from outsiders brings, the country
>must
>also be beholding to market forces. Countries, like people, can't always
>have it
>both ways. And the longer a central bank remains under pressure from market
>forces, the more disasterous the effects will be when the market forces
>force
>the central bank to stand aside.
>
>That's my opinion. I don't dislike Brazil. I hope you don't take it
>personally.
>It's trading.
>
>Best,
>
>Tim Morge
>
>alfredo.simas@xxxxxxx wrote:
>>
>> Hi Netters,
>>
>> Iīve been watching commentaries about the melt down of Brazil
>> recently in this list. I would like to add to these my opinion.
>>
>> Do not bet against Brazil. Brazil is very rich.
>> Speculators have already been severely punished during march
>> 1995 and mildly so last october.
>>
>> On march 1995, under the first severe attack, the Brazilian stock
>> market fell around 20% in one day. That morning, during the heat of
>> the attack, the Brazilian Central Bank devalued the currency
>> slightly, only to entice speculators to short sell the Real even
>> more.
>> When they did it enough, the Central
>> Bank rose the Real's quote and bought it all back making a
>> handsome profit for the country. The speculators were severely
>> battered then.
>> I guess this time the strategy will be different but the Brazilian
>> Central Bank has megatons of dollars to unload at anyone.
>> Brazil is not Russia! Brazilīs economic team is orders of
>> magnitude more competent. Brazil may not have nuclear weapons
>> but, on the other hand, the Brazilian financial weapons are infinitely
>> more strong than those of Russia.
>>
>> Alfredo
>
>
>
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