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Jul 10, 2007

The government's only improving the economy to get elected!

That's the TVBS headline, at least. Thanks, Vincient Siew!

But to get a more fully accurate understanding, let's get the quote. In response to the great performance of the stock market recently, Vincient Siew said:

In this time period, the government has spent all its efforts doing things [literally, "stir-frying" a term that refers to manipulation stock markets or day-trader-like attempts to get rich quick; here, I don't think he means the government's manipulating markets, but is sorta dropping a not so subtle hint]. This is because the government hopes that if it can pull the stock market higher, it might help them in an election, but what I hope for is a stock market that reflects the fundamentals."
OK, well obviously the politicians are doing basically everything to try and get elected. That's sorta how it works.

Second, most of the stock market improvement has to do with improved prospects for growth for Asian companies in many countries. Lots of the capital is foreign buyers coming back in. And yes, there is speculative capital. I'm no expert, but the stock market could drop down to 8,000 again almost as easily as it can go to 10,000. Yet the reason the investors are coming is because the fundamentals look good for at least a while (but to be honest, ask me exactly what all those fundamentals are, and I'm not going to have an acceptable answer).

And why point out that we need to worry more about fundamentals without telling us what we're missing? Come on, econ-guru, share your knowledge so that I know what to look at to judge Taiwan's economic strength!

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