SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : High Tolerance Plasticity
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Gottfried who wrote (2246)3/22/2001 2:55:20 PM
From: energyplay   of 23153
 
The Japan Catch -22

One possible reason that the Fed only cut rates by 50 bp is the Japan crisis.

Their fiscal year ends March 31, and many of their banks may have negative net worth.

Many of these banks also own dollar denominated assets, like T-Bills, U.S. Stocks, etc.
Their debts are almost all in Yen.

A lower yen / higher dollar would make these banks look much better. Cutting more than 50 bp would tend to lower the dollar - Thus I think that the FED wants to avoid any additional cuts until after March 31.

Prediction : The Fed will cut within 10 days of April 1 , probably before Friday, April 6 to counter any drop caused by tax related selling for April 15.

I may try to get some calls on the bank index (BKX) around the end of the month...
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News