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Pastimes : ASK Vendit Off Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: Tom Tallant who wrote (643)	6/11/1999 9:06:00 AM
From: Vendit™	Respond to of 19374

Techs may start out south........we will see.

To: Tom Tallant who wrote (643)	6/12/1999 9:55:00 PM
From: Vendit™	Respond to of 19374

Japan is revived but not recovered Edit in: (Brace yourself Jimmy Carter) Some fool has convienced Japan to tax themselves into prosparity << Vendit Japan's economy sprang back to life -- with growth exploding at a 7.9 percent annual rate this winter -- on a heavy dose of public works spending and a tentative revival of Japan's consumers. Officials from Tokyo's Economic Planning Agency urged caution in announcing the surprisingly good news, noting that one quarter of robust growth does not constitute a full-fledged recovery from the deep recession that has engulfed Japan for two years. Treasury Secretary Robert E. Rubin echoed that skepticism, saying he is not convinced that Japan has overcome the severe problems with bad loans and bankruptcy that have been weighing down the world's second-largest economy. "Individual quarterly numbers don't give you much sense . . . about what's happening in an economy," he said. "Clearly, they have enormous challenges ahead." While the economies of Japan and other Asian nations in crisis may have bottomed out early this year, U.S. officials say those nations still have not made many of the changes that are needed to restore health in the long run, such as loosening government controls over industries and opening markets to foreign competition. Still, Thursday's news will make it harder for Mr. Rubin and President Clinton to openly press Japan for stronger action to spur growth at meetings of the Group of Seven industrial nations beginning in Germany this weekend. Mr. Rubin said he planned to use the meetings to push both Japan and Europe to stimulate growth to achieve more "balance" among the major powers. Last year, the United States accounted for half the growth in the world's economy as Japan slumped in recession and European growth slowed sharply. "It is critically important that Europe and Japan do their part because the international system cannot sustain indefinitely the large imbalances created by disparities in growth and openness between the United States and its major trading partners," he said. Thursday's stunning news sent an elated Tokyo stock market soaring by 2.9 percent, but U.S. financial markets plunged on fears that a rebound in Asia's leading economies will provoke higher inflation worldwide and give the Federal Reserve one more excuse to raise interest rates at the end of the month. The U.S. central bank wants to slow robust growth in the United States that has been averaging over 4 percent a year to quell an uptick in inflation that could be aided by a revival of Europe and Japan. News out of Germany Thursday also showed a stronger-than-expected rebound in the industrial heartland of Europe this spring. Most analysts are cautious about predicting an end to Japan's long downturn, but some were optimistic. "Japan's economy is showing signs of emerging from its worst recession in the postwar era," said Debbie Johnson, economist with Deutsche Morgan Grenfell Inc. in New York, noting that the 1.9 percent increase in national output during the first quarter was much bigger than most analysts expected. Propelling the Asian giant's growth was government spending on roads and bridges, which surged at a whopping 48 percent annual rate, she said, but it also reflected a spurt of consumer spending, which rose at a 5 percent rate, and a 15 percent jump in capital spending by businesses. It was the first increase in a year in consumer spending, which fuels most economic growth in Japan as it does in the United States. Many analysts continue to be gloomy about Japan's prospects, citing the intense depressing effect of falling prices for a broad array of goods produced by Japanese businesses. A wave of downsizings and layoffs by big-name companies like Sony, NEC and Mitsubishi -- while needed to eventually restore health to the economy -- is pushing up unemployment to record levels and adding to the anxiety of Japanese consumers. The economic revival this winter was largely engineered by the government, which has kept Japan's economy on life support with massive doses of public works spending, in fulfillment of pledges by Prime Minister Keizo Obuchi. Japan's Economic Planning Agency noted in releasing the report Thursday that consumer and business spending is not strong enough to support growth without help from the government.