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Strategies & Market Trends : The Millennium Crash
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To: set who wrote (2818)6/21/1998 2:19:00 PM
From: yard_man  Read Replies (1) of 5676
 
Not insane, just optimistic. Market forces were driving the yen down. After another attempt to increase the value of the yen in a couple or three weeks, I think it will resume its slide unless the Japanese announce something pretty darned big. Question is: will they?

If they don't this is just a hiccup on the way to a further round of devaluations. A ballooning trade deficit for the US and later a natural weaking of the dollar.

If they do -- perhaps we get temporary stability and then a gentle appreciation of the yen. If that happens, perhaps there will be some unwinding of the borrowed yen/US bond support?

Rates increase slowing business expansion some as you suggest, but what would indicat that this would be a soft transition. We are in the midst of a very prolonged economic expansion with very high employment - - yet bankruptcies have climbed exponentially lately -- how large an increase in rates and increased unemplyment would it take to produce a strongly reinforcing move in the other direction?

In other words, it is not just US stock prices that are discounting a perfect future, but debt levels folks have been willing to shoulder. I think this is a real wildcard.

I wouldn't recommend owning a lot of consumer or leisure type stocks right now. BTW, how much of the airlines traffic is from pleasure travel?
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