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Pastimes : Ask Mohan about the Market

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To: Elllk who wrote (9420)11/25/1997 10:20:00 PM
From: Joan Osland Graffius  Read Replies (1) of 18056
 
Hi Larry, >>Is it possible that in exchange Greenspan and the Fed get some control over the how fast the Japanese sell US securities and treasuries so that a slow, controlled retreat of the market can be engineered (they hope?) over several months (more than 1000 points since it was that long ago that Greenspan first said the market was over valued).

There are somethings I do not understand. If the Fed is going to loan the BOJ $'s (BTW I hope they pay a high interest rate), or buy back bonds in exchange for $'s, then in the case of the FED buying bonds this transaction must be accounted for somewhere. I would think at minimum during the refunding for the bonds, short or long term. Another thing that is bothering me is the BOJ needs to take the balance of payment $'s and spend it on domestic finance problems. I am assuming they are not going to be able to solve the total problem with tax or other domestic funds. Anyway then tell me who is going to fund our debt.

Lets assume the BOJ continues to decrease its support of our debt how high will the bonds have to go before they become attractive to the investors that are looking for their best return.

Just trying to figure this thing out. Theory is great but this thing has to be implemented.

Joan
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