The buying opportunity is coming!!!!!!
Sony reams hashimoto--publicly!!!!!!!!!
David DeRosa: Herbert Hoover Hashimoto?
By David DeRosa
Special to TheStreet.com
4/3/98 1:16 PM ET
Hello Mr. Norio Ohga, chairman of Sony.
Imagine that the chairman of Sony would give an interview and tell the world, "The Japanese economy is on the verge of collapsing." Then he went on to blast the Japanese politicians, comparing Hashimoto to Herbert Hoover. "Clearly I'd like politicians to know more about the world." Clearly, Hashimoto is a good candidate to walk the plank.
Who is Hashimoto anyway? His big claim to fame is that he was Mickey Kantor's contact during the trade wars that took place in the first two years of the Clinton administration. Remember all that jazz about "Super 301"? What a bunch of nonsense that business was. At home, Hashimoto was credited as the man who saved the Japanese exporters from the Clinton protectionist trade-war mongers. Next thing you know, the guy gets elected prime minister.
Frankly Hashimoto was just a flash in the pan -- the hero du jour of yesterday. Now he is being roasted by the most visible man in corporate Japan, the head of the electronics giant, Sony. This has to be somewhat of a bitter moment for the prime minister, especially when you remember that Sony is perhaps the most well-known Japanese exporter!
It reminds me of what a hard-boiled Chicago Democratic politician who once told me about a Jimmy Carter who was nearing the end of his term with the election looming. "Carter, nah. We are all done with him now."
And talk about bitter ironies -- here we have Moody's stunning announcement that it is scoring Japan's outlook as negative (but the triple A stays for now). This literally kicked the tar out of the stock and bond markets. The irony is that one of the reasons for Moody's caution is the size of the Japanese budget deficit!
So on one hand they have every minister in the world telling them to cut taxes and on the other hand they have the ratings agencies holding their feet to the fire over the federal deficit. Snakebit everywhere they step.
Our good friend Mr. Yen, Sakakibara, gave the world a good April Fool's Day chuckle when he told a Reuters reporter that the "biggest problem" for Japan is poor economic sentiment. Then he added, "The 10-year government bond yield of around 1.5% is abnormal and reflects extreme market pessimism." There you go -- frankly just what I have been saying all along -- he thinks things are bad because expectations and appearances are bad. He is humiliated at the weak yen and the low bond yield.
Well sir, your currency and your bond market are in fact weak, but that is not necessarily a bad thing. In fact those are the very factors that may save Japan, in spite of yourself. Japan needs a weak, and in fact weaker, yen. And it also needs rock-bottom interest rates. Think of it as a natural process of self-healing. If you don't see that, then let me explain it to you this way: What chance would you have of staging a recovery now if your bond yields rose to 6% and the yen went back to 80 to the dollar?
In the midst of all this terrible talk, the minister of finance has managed to find the time to suggest that the international hedge funds be regulated! Mr. Haruhiko Kuroda, the director-general of MoF's International Finance Bureau, was quoted today as saying, "One option would be to ask hedge funds to disclose information that would allow us to see what sort of trades they are making and whether they are being speculative and this is something the Finance Ministry could consider." Who has he been talking to, Mahathir? Well I will save you the trouble, Mr. Kuroda -- every hedge fund I know of is speculating that you and your associates at MoF, and the Bank of Japan, and Herbert Hoover Hashimoto are mismanaging your economy. |
