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Pastimes : Ask Mohan about the Market

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To: Investor2 who wrote (13780)2/2/1998 10:37:00 PM
From: Mike M2  Read Replies (2) of 18056
 
I2, I understand that Japanese accounting differences tend to understate earnings relative to American GAAP . This is one factor in explaining the high PEs in Japan. I do not know how to quantify the magnitude of impact of accounting differences. does anyone have any figures?. One factor to consider is Japan could rely on the U.S. to purchase their goods. A large percentage of the world's economic GROWTH came from the SEA economies during the last 6 years. Now that their economies are devastated the rest of the world looks to the U.S to be the buyer of last resort. A role which cannot be fulfilled due to political pressure-a large trade deficit means lost jobs and economic reasons- consumer debt load, delinqencies , bankruptcies are at or near record levels. The kicker will be the negative wealth effects from a declining stock market-something that most investors cannot even imagine-g- Mike
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