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Strategies & Market Trends : Waiting for the big Kahuna

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To: Staff who wrote (10570)	12/1/1997 2:12:00 PM
From: Lazarus_Long	Read Replies (4) of 94695

<< Well Japan over the past 3 years has accounted for 35% of the governments debt financing.. >> << The 10 largest banks in the world( net assets) are all in Japan. >> Can you provide me with references for these? I'm not doubting what you say, but I'd like to improve my knowledge of the situation. << The a large portion of the loan portfolio's of these Japanese banks are tied to assets that are Nikkei performance related as per real estate and other such holdings. >> I understand that in 1989 Tokyo was worth more than the entire United States and that downtown Tokyo was worth more than all of California. Japanese banks are still holding loans based on those valuations. They're worth about 10% of their 1989 value. On the other hand... The Japanese econpmy has been in the toilet all through the '90s. You can see what effect this has had on the US economy. We should pay them to stay poor. << Mr. Rubin at the treasurly sure had this on his mind it would seem. Word had it that last week he personally informed the japaneese ministry that ou government indeed was willing to loan Japan up to 100 billion( yes that's 100 billion gang)if need be to keep them from taking home money they have loaned us by purchasing government bonds and bills. You call that sound fiscal ? Sounds like voodoo economics to me! >> No, I don't call that sound fiscal policy. I call it monetary masturbation. << The US is living on the edge right now praying that Japan does not panic by dumping there bond portfoloio's and bring that moeny home. It if does. You would have a massive exodus of cash in a matter of days out of stocks and into bonds and bills that would be so unprecedented it would make the 500 point down day look like a kindergarden recess. >> And if the Japanese destroy the US economy, they commit sepukku (sp?). Their Asian markets are already under water; if they destroy us, they start their own depression. I think they are just as eager to avoid this as the US is. I'd say it is a better bet that it won't happen than that it will.

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