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Technology Stocks : INTEL TRADER
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To: smolejv@gmx.net who wrote (3583)8/25/1998 3:42:00 AM
From: Gersh Avery  Read Replies (2) of 11051
 
If the Japanese are required to sell off US bonds to fund the saving of some of their banks then they (bonds) are going to take a sharp fall. This would be a short term situation.

If the US stock market has seen a bottom, then cash which has been moving from stocks to bonds (safety) will return there. This would be a longer term situation.

In the first case the dollar will drop, in the second it will rise.

In the first case US stocks will fall, in the second they will rise.

In both cases bonds will fall.

Seems to me the way to take advantage would be short US bonds or some sort of bond puts.

The shortfall of this method would be if Japan suddenly starts to get better and US stocks continue to fall. Another shortfall would be if the FED were to lower interest rates. As the FED just got done having their meeting that threat is at least another 5 weeks away.

BTW bonds being sold to support Japanese banks would be described on TeVe as a government intervention to support the yen.

Gersh
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