Novell (NOVL) dirt cheap, good buy? Message Board

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Technology Stocks : Novell (NOVL) dirt cheap, good buy?

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To: Mat Miller who wrote (10482)	3/30/1997 6:17:00 PM
From: FundAce	of 42771

Mat, I agree. I don't see Japan actually raising rates when their in the midst of a downturn; however, if relative inflation rates between the US and Japan move against the former, then this will increase the "real rate of interest" even though Japan's central bank may not increase rates nominal rates. This possibility would put downward pressure on the dollar and make dollars assets worth less, thus producing the foundation to outflows from US Bond markets. The key here will be just how fast our economy is growing currently. The Fed's recent .25 percent increase is just a start. In my view expect about three more increases this year (each .25 percent)...bottom line, if we succeed in holding down inflation, bond market will be fine. If the Fed acts too late and too meekly, were in trouble, big trouble. With over 50% of the bonds purchased by Japan, and where inflows and outflows can change in a heart beat- the US is vulnurable not only to very high bond yields, but also very low equity values (ie, a Dow at sub 6000). All the best, Fundace

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