I was thinking to myself today that there must be a lot of funny money in the internet stocks. Why would AOL pay 4.2 billion for Netscape? Everybody pretty much agreed that Netscape was going under. Whenever I've gone under, I've had to sell at a loss. But if people who invest in AOL also invest in Netscape, and the investment in Netscape is going bad, then it makes sense for them to borrow mega bucks with their inflated AOL stock as collateral, in order to buy Netscape and keep its stock afloat. I should have written that as a question. Is that how it works?
As for Brazil's devaluation: it seems to me that the summer's currency crisis came to a pause when the IMF and President Rubin arranged a big loan for Brazil. The Brazilian elections intervened, delaying the delivery of the money. But now that they have it, the currency crisis can take off where it left off. If you were going to sell Brazilian currency or stock, would you do it after the world sends money (when you have a chance to get a decent price) or before, when there's no bottom in sight? There, I did phrase that one as a question.
If this is true, it adds credibility to the notion that the crisis that began in Asia is indeed the beginning of an unstoppable global panic. This is the kind of BIG wave revolutionaries look for with a gleam in their eye like surfers. Here it comes. Watch the markets dive!
Quincy