SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : THQ,Inc. (THQI)
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Mr. Aloha who wrote (6152)6/18/1998 10:58:00 PM
From: Bleeker  Read Replies (3) of 14266
 
I prefer Chagall & Basquait myself. Your bond & interest rate analysis
is totally off. First, U.S. real interest rates are the highest they
have been since the 60s given the low rate of inflation and the
collapse in commodity prices which is ongoing (take a look at the
Knight Ridder Commodities Indexes.). You're making a big mistake by
looking at nominal rates or non-inflation adjusted ineterst rates. The
fact is that real interest rates are tighter now than two years ago.

Second, you should take a look at Bank of Japan's quarterly purchases
of U.S Treasuries in recent years. According to the Federal Reserve
Bank of NY, the BOJ has been a net buyer of U.S Treasuries this year.
The reason is simple: the spread between U.S. Treasuries and Japanese
government bonds (JGBs) is more than 4.5% for comparable maturity
10-year bonds. Do you think the BOJ is going to give up a no sweat
4.5% rate of return for taking no risk and clip 0.5% coupons off of
JGBs instead? Right.

Third, Japan is looking for export led growth. Unlike the U.S. where
trade contributes only 11% of GDP, Japan's economy is much more
dependent on trade and so forex swings have a more material effect
on its economy. So if Japan sold U.S. Treasuries and repatriated
the money it would bolster the yen and put a lid on their export
capacity. Your logic is confused. If Japan sells Treasuries to
bolster the yen that would result in higher U.S. bond yields, which
actually makes U.S.-denominated assets (bonds especially) much more
attractive. Conclusion: Japan will continue to be a net buyer of U.S.
Treasuries because it has no choice really. It has no other place but
to recycle its export generated yen proceeds in higher yielding
U.S. securities.

Finally, the U.S. Treasury market is more liquid and deeper than
the waters surrounding Hawaii (o.k. I'm exaggerating a bit here.)
Japan's holdings of U.S. Treasuries is a drop in the bucket. By
the way, the U.K. and the Netherlands are bigger holders of U.S
bonds than Japan. And China is the biggest. It's a conspiracy.

Bleeker
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News