Re: Oz and the American Dream

["Patrick Bond" <pbond@xxxxxxxxxx>]

Interestingly, just over a year ago we had the same experience with
Hale in Jo'burg.

> Date:          Fri, 1 May 1998 20:58:03 +1000
> Reply-to:      pen-l@xxxxxxxxxxxxxxxxxxx
> From:          Rob Schaap <rws@xxxxxxxxxxxxxxxxxxxxxxxxx>
> To:            pen-l@xxxxxxxxxxxxxxxxxxx
> Subject:       Oz and the American Dream

> G'day Penners,
>
> Oz is currently hosting global economist, fund manager, markets guru,  and
> besuited, arrogant, tell-the-dumb-locals-to-give-it-up-for-daddy, bloody
> American David Hale (I mean to condemn but a particular genus of Homo
> Americanus here, of course - Americanus Armanirolexicus.  They're a
> migratory lot, and you only have to sprinkle a few consultancy contracts on
> the average Australian lawn  to attract a flock of 'em.  As pump-action
> shotguns are illegal here now, I don't bother any more.)
>
> Hale tells us the US Fed's model for valuing stock has Wall Street
> somewhere between 10 and 20% over the odds.  At current rates of euphoric
> appreciation, that figure could be between 30 and 40% by Christmas.  By
> then, he reckons, any correction might better be termed a crash (is he
> telling Greenspan to hit the interest rate button now, I'm thinking ... ).
>
> Mind you, he warns earnestly, we're in uncharted territory here; what with
> such enormous civvie participation, with mutual funds bigger than the
> banking system, and with a DJI approaching five figures ... we may no
> longer be able to trust these old valuation models ...
>
> Oh, and the Yen must ultimately fall too (at least he reads the PEN-L
> archives, eh?).  It's just a matter of holding off that date until regional
> current accounts have stabilised (he didn't say how and when that would
> come about).
>
> So what should Australian investors (and 40% of us have our shaking mits in
> the markets) do about that, asks the concerned anchorman.  Why, fully
> privatise Telstra and all your other public utilities, says Hale.  That
> way, you'll have a much more diversified exchange, and you'll depend less
> on the cycle-vulnerable commodities that dominate Australian market values
> today.  But wouldn't Oz exchange levels still depend on Wall St
> fluctuations, asks our boy.  Well, if you depend on your spare dollars a
> lot, and in the short term, well, get into cash quickish, pronounces Hale
> blithely.
>
> So the markets are overvalued and volatile to the degree they can't be
> trusted in the short term, Japanese problems will be decisive and negative
> in the medium term, and we should trade in all our public infrastructure so
> we can more fully be exposed to the benefits of that action.
>
> Thanks, Dave.  It's all clear to me now.
>
> Arrogant as some of these proselytising Yanks may be (and an American
> accent and an Armani suit gets you on any current affairs show you want
> over here), it must be said they are right about one thing.
>
> We are dumb locals.
>
> Cheers,
> Rob.
>
>
>