Forum Archive Index - December 2000

["G Stolwyk" <stolwyk@wave.co.nz>]

 

 

Hugh,

 

 

G: Arising from our entry of Dec 18, it seems that Greenspan would prefer an interest rate cut and a growth rate of say 2-2.5%.

I don't think that he would be very keen on another Reagan style tax cut.

 

H: The multiplier effect of such a cut-unless it is spread over time- would be hard to control. By signalling an interest cut, the market already starts to factor this in.

The market correction which started earlier this year was certainly quickly compounded by high oil prices!

 

G: Opec is already talking about cutting back their supply: it is clear that the GDP of some large countries in Europe and in Asia are going to be affected!

I read that the restructuring process in some of these countries is very slow and that this often amounts to 'papering over the cracks'. We need to be wary of any possible consequences.

 

H: These countries are very nationalistic, you know! They want it both ways: the IMF to bail them out without them having to sell  companies to foreigners.

They tend to sell near-bankrupt businesses and take the cash!

 

G: I noticed that the scene in the US has made little impact on the Euro currency; that will make Greenspan's job easier.The country is still very powerful.

H: The NZ currency has firmed somewhat as a consequence of some good reports lately and the news from Australia is not that good, I read.

 

G: How do you read this in terms of investments?

H: The reader needs to refer to the item: 'Working at the coal face...' of Dec 10 and read first the disclaimer at the end of that email.

 

A number of stocks are mentioned there. SKC has now obtained the Hamilton license; the NSW government is having a look at the gaming scene and this could affect TAB perhaps. The stock has not moved much.

Overall, these stocks have not gone down much considering the falls in overseas markets. Because of the falling $A the total outlay has incurred a loss in the short period.

Longer term investors have seen this all before!!

 

Gerry