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Currency Events

Scott Shuger
Posted Friday, Oct. 24, 1997, at 6:33 AM ET

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.

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Scott Shuger was a Slate senior writer and the original author of "Today's Papers." He died June 15, 2002.
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