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Biotech / Medical : Biotech Valuation

CRSP 53.85

-4.5%

Jan 9 9:30 AM EST

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To: Biomaven who wrote (8682)	6/17/2003 12:04:03 AM
From: John Metcalf	Read Replies (1) of 52153

>I read somewhere that money market funds are in trouble because their expenses are in danger of exceeding their spread (the difference between what they can earn on money and what they pay investors). An interesting thought is what happens if short term rates drop further - do the money market funds operate at a loss? go out of business? Anybody know what has happened in Japan to such funds?> What are they really doing in Japan? Selling investments at happy hour. Interest income? Huh? japantimes.co.jp Twenty-six months ago, Junichiro Koizumi was elected as a Reform P.M. During that time, the Nikkei 225 has lost 40%. The campaign pledge not to issue more than $30 T yen in new bonds each year has been forgotten. There is a proposal to tax cash in accounts (a Really Negative return) and a proposal (favored by Keidanren and the Chairman of Toyota) to raise the national sales tax from 8% to 16%. The largest pension fund (the corrupt governmental Postal Savings) is being privatized by degrees. Last week the Lower House of Diet passed legislation to partially release life insurers from their contractual obligation to deliver guaranteed returns. Think it can't happen here? I own a retirement account at AIG-SunAmerica that went negative in its money market option a year ago. >An interesting thought experiment is to put you in Japan say five years ago and let you invest (locally) in any asset class you chose. I'm not sure there is anything that would have done very well for you (including the dollar). If that is the case it would be a sobering thought - sometimes there just may not be good choices.> The best choice five years ago was the Carry Trade -- borrow money for nothing, and invest it in US interest-bearing securities (bet you knew that-:). Those who did so got 5 points at no risk, payable in a strong currency. I'd even suggest that when returns dissapear in the U.S., there will be major problems from the exodus of Japanese capital. Of course, this will cause rates to rise, which will tend to cause Japanese capital to return.... My view is that the Fed has vowed to inflate away any problems, in the sure and certain belief that an electoral majority of us are far too stupid to notice anything but a nominal return. No administration is ever going to be defeated by people protesting the nominal 25% annual increase in the cost of a Mercedes. Just my 1.6 cents -- down from 2 cents a mere 12 months ago.

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