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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Henry Volquardsen who wrote (367)	7/30/1998 1:00:00 PM
From: Robert Douglas	Read Replies (1) of 3536

Henry, Wow! Great Post. Your description of professional money being skittish is so very accurate. This not only applies to money market deposits but to equities as well. Having worked in the profession, my only explanation is that people EXPECT the professionals to be savvy and well informed. What basically this translates into is that the professionally managed money flees at any and all perceived risks under the guise of being prudent. It works the same way in reverse, where the professionals all flock in the same herd to those investments considered "safe" by consensus of their peers. You remember those safe investments. The list includes Latin American countries in the 80s, leveraged buyouts, over-priced real estate in California and Japan. All of these were big losers after they were labeled safe and prudent places to park money. I would be interested in your thoughts on the deposits in Japan. Is there a large amount of money that is just sitting there earning paltry deposit rates? If so what do you know about the "big bang" in Japan and how it might bring competition into the market for deposits? Robert

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