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Strategies & Market Trends : Asia Forum
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To: Stitch who wrote (3031)4/11/1998 3:23:00 AM
From: Michael Sphar  Read Replies (3) of 9980
 
I'm getting lost with the program here...Help me out please!

First the Japanese corner the market on real estate and have their own private stock market bubble back in the hazy remembrances of mine. Then the bubble bursts, and the real estate market collapses. So the banks are stuck with a bunch of non-performing loans which they don't call in or don't write off. Eventually some institutions start to collapse.

Then the Asian tigers start hitting the wall.

Then they set up April 1st fiscal year as the start of a "come clean" policy for their banks.

Then they raise taxes a lot.

Then they schedule April 1st for investment independence day and call it the Big Bang.

Then Moody's lowers their credit rating on Japan's sovereign debt.

Then they lower taxes somewhat with this $30 bln over two years deal.

Now they take to the currency markets and defend the yen and sink the dollar.

I'm lost, this reminds me of the logic behind Alec Guiness's Bridge on The River Kwai". Last time I checked, it was a Japanese engineering firm that got the contract to reconstruct that bridge in 1947 and I thought they lost in the prior war.

So is this currency action a knee jerk reaction to Moodys ? Will it help them somehow respark their economy ? I'm pretty dense when it comes to all this international stuff so go slowly will ya.
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