Prague, 31 October 1997 (RFE/RL) -- In the week just ending of news about Chinese-U.S. relations, Iraqi bellicosity, and financial markets volatility, many Western commentators studied the world economy and found a variety of lessons.
WALL STREET JOURNAL: Remarkable ties now link global financial markets
Staff writer Bernard Wysocki Jr. says in a news analysis today that the week's financial Hong Kong flu may be a symptom of a deeper financial weakness. He writes: "With lightning speed, a collapsing stock market in Hong Kong spread this week across time zones and around the world, rattling investors from Estonia to Brazil. If nothing else, the episode demonstrated the remarkable ties now linking global financial markets.
"But in the months ahead, a bigger question is this: Will the real economic problems that threaten to throttle growth in spending, employment and investment in Southeast Asia spread just as fast?"
Wysocki says: "A foretaste of just how bad things could get came (yesterday) when rating agency Moody's Invester Service Inc. downgraded to negative from stable, citing high exposure to property loans."
WASHINGTON POST: The great boom of the '90s is stalled in Asia
Sandra Sugawara writes from Tokyo: "The sharp fall in Asian financial markets this month has created new concerns about the stability of the region's banks. Many economists say massive government intervention might be needed to make the banks financially fit and able to aid the region's recovery.
"New signs of a potential banking crunch came (yesterday), as Moody's Investors Service downgraded its rating of Hong Kong banks, noting currency pressures and their big collection of potentially
risky real estate loans. Analysts attributed the Hong Kong stock market's plunge of almost 4 percent (yesterday) to that report.
"Economists here generally don't foresee a wave of disastrous defaults, because Asian governments historically have preferred to prop up sick banks indefinitely rather than shut them down and take
the pain all at once. Instead, the fear is that many banks will be neither dead nor fully alive, a drag on their economies, unable to lend the money that will be needed to get the region moving again. What is clear is that all over Asia, the great boom of the '90s is stalled and banks often are left holding the bag."
LOS ANGELES TIMES: The plunge is infecting markets worldwide
StafF writers Tom Petruno and Debora Vrana write today that uncertainty in Asia is sending U.S. investors fleeing from overseas investment funds. The writers say: "Unnerved by severe losses in Asian markets, some U.S. investors are fleeing foreign stock mutual funds at the fastest pace since 1990, new data show. Perhaps more important, the plunge in Asian stock values this
year, which now is infecting other markets worldwide, has forced many investment advisers to revive an old debate: Is foreign investing even worth the trouble and risk for Americans, many of whom have embraced the concept only in recent years?"
They say: "The redemptions in foreign funds can clearly be traced to Asia's economic and market woes, which began with Thailand's devaluation of its currency on July 2 and have since ballooned into a