Word: asia
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Dates: during 1990-1999
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...that a group of money sharps acting half a world away could have any effect on the seemingly bulletproof U.S. economy. But the stock market's swoon--the Dow industrial index was off some 450 points in the past two weeks--is directly linked to the deepening trouble in Asia, which represents only 30% of American exports but about 100% of American worries. Cheaper Asian goods, made possible by currency devaluations, have caused the U.S. trade deficit to balloon: America is buying more from the Pacific rim and selling less. While that's good for companies like Wal-Mart...
...currency speculators, having knocked off Asia's weaklings, such as the Thai baht and the Malaysian ringgit, are now taking on the region's Godzillas: the Japanese yen, the Hong Kong dollar and the Chinese renminbi. The three are relatively stable, buttressed by huge economies and, in the case of the renminbi and the HKD, by solid "pegs" to the U.S. dollar that the Chinese government has pledged to defend--even at tremendous national cost...
That cost is growing. Last Tuesday the yen hit a new low--about 147 to the U.S. dollar--and the region hiccuped with pain. The cheap yen was a strong signal to investors who were betting that Asia has farther down to go before it takes any steps up. On international markets, it was the yen slip that triggered the attack against the HKD. During a weeklong run-and-gun battle between speculators and the Hong Kong Monetary Authority, the peg remained firm. (The HKD is pegged to the U.S. dollar at a ratio of 7.8 to 1.) A defiant...
...expansion falters. But Fed Chairman Alan Greenspan, who warned of "irrational exuberance" in stock prices as far back as December 1996, remains more concerned about the threat of inflation than about the danger of a recession or a market collapse. Just last month Greenspan warned that plunging exports to Asia had done little to ease a growing U.S. labor shortage...
...market's craziness last week brought that lesson home to me. While everyone knows the troubles that left the market vulnerable--Asia, Lewinsky, stock prices that are historically high relative to earnings--what set off last Tuesday's rockslide was one of those oft-quoted gurus, Ralph Acampora of Prudential Securities, who reversed his prediction of a day earlier and said on CNBC that we may be entering a bear market for blue chips. The Dow Jones 30 industrials shed 300 points in a flash. But the real pain came Wednesday, when the market dropped an additional...