Currency Events
The Hong Kong sell-off leads all around. Where the papers vary is in their
ability to say what happened. USA Today says the event was "the most widespread
reaction to the spreading Southeast Asia currency crisis," but doesn't say a
further word explaining that crisis or how it caused the sell-off. The Washington Post quotes this expert "explanation": "The
government is willing to sacrifice its equity market to the currency peg." And
offers this "clarification": "But analysts say the peg won't be easy to defend,
however. Hong Kong would have to draw heavily on its own reserves and on those
of China to support the market in the face of selling by currency
speculators."
The New York Times
does better, explaining that Hong Kong sought to support its faltering currency
by sharply raising overnight interest rates, to 300 percent. Then, explains the
Times , investors responded by driving down Hong Kong stock prices on
fears that higher rates would mean shriveling profits for the financial and
property companies that are the market's backbone. But still, nobody explains
why it wasn't obvious ahead of time that 300% interest was a tad
incendiary.
And there's the usual quote-a-bull, quote-a-bear approach to what it all
means. The Los Angeles Times quotes one Wall Streeter saying, "This is
the end of equity mania." The WP finds one who says the problems with
Asia's currencies could shave two-tenths of a percentage point off the growth
of the U.S. GDP, (Over what period of time? Is that a lot? The Post
never says.), and that this might please the Fed, which of course, would please
the stock market. Meanwhile, the NYT says the Hong Kong developments
"could lead to a broad regional economic slowdown that would dampen the sales
and earnings not just of local companies, but of major corporations from the
United States to Europe that operate there." But the Times also says
many market analysts believe that lower stock prices are a good buying
opportunity, and would bring stability to the U.S. stock market. To review:
Stock prices could go up, or they could go down. Either could be good. So, the
question about such "day after" stock market stories remains: "Why give them so
much space?"
USAT reports that Bob Dole, responding to recent disclosures about
his use of soft money-fueled presidential campaign ads, has offered to testify
at the Senate fund-raising hearings. Sen. Fred Thompson, says the paper, will
invite both Dole and Bill Clinton to testify.
The WP runs a piece inside reporting that the Pentagon inspector
general has determined that a set of chemical weapons logs, that veterans'
groups say could provide valuable information about Desert Storm exposure, was
mistakenly destroyed after the war. And a second set is still missing. It's
good to see that U.S. military tradition continues: the LAT reports that
records indicating what happened to the thousands and thousands of nuclear
warheads no longer counted as in the U.S. arsenal are missing too.
The Wall Street Journal reports that more American families own
homes than ever before--66 percent of them--which breaks the previous record
set in 1980. The Journal notes that in 1994, the Clinton administration
set the goal of breaking this record by the year 2000.
USAT 's "USA Snapshot" provides an interesting window into the minds
of the rich, revealing that in a survey, members of the nation's wealthiest
households said they'd pay $640,000 to get into heaven, and $487,000 for true
love, but only $55,000 to be president. But more, apparently, to have a cup of
coffee with him.
