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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up? -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (2238)	2/7/2000 12:05:00 AM
From: Step1	Read Replies (2) \| Respond to of 3902

Ron, FWIW, I remain bearish on the Nikkei Thx for providing balanced commentary on these latest developments. The fact that people have become mesmerized by the markets (and especially with the media`s help promoting the 1000% gainers and forgetting the losers) is in itself no guarantee that things will continue up and onward... I think Stratfor provided a fairly sound analysis of the facts at hand, of course given extra future developments the model could change for the better, but essentially my view of the present situation in Japan is that the governement has absolutely no vision and is from day to day engaged in keeping the titanic afloat. They think 3 months ahead max, and the crowds , not having woken up after 30 years of sleeping at the wheel (remember the expression convoy system? That convoy was on steel rails , so no need to steeer it...) are not aware of where all this irresponsibility and lack of vision will take them. The fact that the Nikkei has marched along is, in my opinion, not fully connected to the underlying economics (what is anymore?) but at one point it will reconnect. Rubber band analogy might be best, and I don`t think it has any catching up to do , so that leaves snapping down. My two yen worth. I may sound like a broken clock but at least I know I will eventually be right... one more time ;-) Those new funds entering the market are well publicised (and if there are any contrarians in the audience, perhaps a divine sign in the sky?) but at any rate, if other people`s targets on this thread are not achieved and quickly, considering the amount of money entering the market, then we are due for a correction... I am short again at 19740 or so and will be watching closely to see if we break 20,000 and on what volume. My belief is that some small players have been herded and are about to get slam dunked to the 17800 level. Disclaimer applies BWDIK , this is not investment advice, etc ... Stephan My comments on your message follow: >>Stratfor is pretty good at analyzing the overall picture in Japan, and I would concur that their economic pump-priming isn't working.<< How is Stratfor`s record? I think they were the talk on the Asia thread of some major blunder in the last couple of years...??? I concur that pump-priming isnt working. Besides after a few years of the same kind of pork barrel style tries, they are running out of intelligent projects FAST!!! If the private sector made (now) laughable investments in grand but bankrupt-before-they-were-even-completed projects, then the government is now following in their steps, 10 years later. History doesn`t repeat itself? >> However, what I think the Japanese govt is doing is to also support and create an inseparable linkage between the govt and Japanese banks. Why sell bonds to the general public when you make use of some of the bank deposits that banks are paying interest on, yet having trouble finding borrowers.<< I am under the impression that the general public doesn`t buy bonds directly. Maybe I just misunderstood your comment. Banks were the biggest buyers, as well as the Postal fund and life insurance companies. As you know with the low interest they receive on those (bonds) only the bond funds held by the brokerage house would be doing ok, as the life insurance companies would be hard pressed to meet their contractual obligations at about 1 to 1.8 %... >>We're talking a lot of money here and this makes the Japanese govt their banking sectors largest customer/borrower. It should also put more direct pressure on the Bank of Japan to bow to the govt will and help to decrease the strength of the yen and boost export growth. Thus, the govt is now supporting the bank's liquidity directly (we all know the govt is good for its debt, right?.. :0) <<< The government is run by a bunch of paid for scoundrels and what`s more, they get to change the rules when the game goes against them. They will not default, they will rewrite the terms until it fits their end. The average people with their hard earned savings will be made to pay ... >>>But there is no doubt that funding their government through short-term bank lending or through bond issuances, both equate to charging their national "credit card", for which Japanese taxpayers are left holding the bag.<<< The only reasonable policy (and after the next election they (teh new gov) may be in a better position to institute it) would be to raise interest rates. Right now it would be suicide, politically. Their present policy only invites deflation, hoarding of cash in the mattress and keeps bankrupt cos alive a little longer... >> And don't we remember back in the '80s when the Japanese were hautily admonishing the US to clean up our house and reduce our government spending. << There are so many different macro economic " live " case studies to further one`s education at the moment, it is just incredible. it will be weird to see the times you lived through written about in history books, and I believe they will be times worth writing about... Best to you Stephan