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To: Lee who wrote (138198)	7/31/1999 8:24:00 PM
From: JRI	Read Replies (1) \| Respond to of 176387

Lee, hard to dispute you...let me add, however, I am very sceptical of economic data coming from Japan right now...I am fairly certain that the ruling party has a major election coming in the next month or so...and it wouldn't be the first time that the data was manipulated...as well, Japan really has not followed through on the wholesale changes that are needed, so I am of the opinion that the Japanese economy will be in a no-man's land a bit longer....let us see if, after the election, the gvt. has the courage to do the right thing... If they don't, the Japanese recovery will probably be a fraud, short-lived and weak...

To: Lee who wrote (138198)	7/31/1999 11:32:00 PM
From: lin luo	Read Replies (1) \| Respond to of 176387

Lee, Good analysis. However, I may have to take a complete opposite side to view the current situations. I think the problem is at A. G. Ever since he opened his mouth two weeks ago the long bond's yield moved from 5.8+% to 6.1%. Last Thursday he did a double talk in the meeting on the inflation: he argued why paying off national debts was good because the rate could go lower. He even wants or is willing to increase interest rate right now. How can he lower the rate by then when we have no debts. Nobody even questions or pays attention on what he said. I think he is the source of inflation. Back to 1993/94, we had terrible inflation (CRB was around 250, copper at $1.50/lb compared with today's $0.70/lb). The reason behind it was the national debts and people bet dollar would go much lower. I don't remember how many times he raised interest rates. (No wonder Pres. Bush admitted at Charlie Rose Show his sadness by re-appointing A. G.) It was Rubin who saw the problems and insisted the strong dollar, and ever since then we have had low interest rate and low inflation. Last summer A. G. was forced to lower rate by the street bankers when we had the LTCM problem. The price for what Rubin had done is higher market prices. If those foreigners have questions on whether they can make money in the US, I am sure we will have lower dollar, higher inflation. I can not imagine he comes out on Monday and says he is going to lower interest rate. What do you think will happen? we are going to have higher inflation? We have a very weak Summers. That is why Rubin is very much missed. Hopefully we will have good winters. Actually, I think moderate inflation is very good to the markets. Now we entered the volatile August with fund managers on vacations and day traders are getting crazy, I think we will have fun.