HSL / Newsletter Sample

May 2003

SARS is either very serious or not really serious— mostly media feeding frenzy. I get input on both sides. IMO, the WHO Toronto warning was hasty. It’s too soon to say & I’m no medic. But medical aspects apart, SARS is something almost completely unique in terms of markets & economic impact. Perception is a problem, which the media is directing (again). Perception has been ultra-negative in some areas (right or wrong), which has brought biz to a total standstill in HongKong & parts of China. It did so in speed& style not seen in years, if ever. Movement of people, money, goods is slowed or stopped in some places, but is having a knock-on effect globally—“just in case.”

Chic Goslin notes that SARS is “completely beyond ability of central banks & govts to override. Once an economy comes to almost dead stop, regardless of whether it can do away with the cause, it’s very difficult to get it going again,& especially get it going at same speed.” This is potentially the most dangerous economic & market factor the world has seen in very long time & has the potential to produce major moves in many, if not all, markets. My hunch is it’s overblown, but world perception is what counts & it’s running scared at the moment. Til the sun rises, cut back on mkt positions, except gold which seems immune to this kind of bad news. •• To vet the strong disbelievers, check these web sites: www.nomorefakenews.com and www.sarstravel.com


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