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Biotech / Medical : PARANOID! TIRED OF TALKING TO YOURSELF? LET'S TALK(TTP) -- Ignore unavailable to you. Want to Upgrade?

To: Arthur Radley who wrote (607)	6/3/2000 5:27:00 PM
From: Scott H. Davis	Read Replies (1) \| Respond to of 626

Or someone just pocketed a near 50% short term gain. I went to mostly cash in late Feb/early March. Have done a few trades since then to take advantage of short term weakness, but am still about 50% cash. About to take profits on some of the recent trades too. Don't think the bear is back in hibernation yet. FYI, a recent e-mail for Princeton Economics institute (the macro econ stuff - thier analysis was a key ingredient in my side-stepping a good part of the fall. FYI Scott Mostly the market is now focusing on the non-farm payroll and employment numbers that are due to come out on Friday morning. If these numbers show the economy is cooling, you will see the stock market rally because it means the FED will not need to raise rates as aggressively as is already discounted into the markets. Substantially less attention is being paid to the Daihyaku Life Insurance Company Failure. Bloomberg carried a small piece noting that the dollar rallied a couple of yen on the back of this event. The worry is that more insurance companies may fail. There is a lot of nervousness that more bad news may be coming from the Japanese Financial sector. Cooking the books by Japanese corporations and cooking the economic statistics by the Japanese Government has long been a favorite passtime in Japan. This leaves investors quite anxious to the true state of the Japanese financial system. The Japanese Govt has now succeeded! It has long been our view that Japan would succeed. Now we have been proven correct. The Japanese government is now succeeding in bankrupting the Life insurance companies in their vain attempt to subsidise Japanese banks. The reason Japanese officials like Hayami-san continue to float the idea of moving away from the Zero Rate policy is because maintaining artificially low rates is causing utter havoc to Life Insurance companies. The Japanese Life Insurance companies need a return of at least 4-6% to meet their longterm liabilities. They have not been meeting this target for quite some time. Why? The Japanese government chose to subsidize Japanese banks by maintaining artificially low short-term rates. Borrowing money at nearly Zero and investing that money in JGBs for 2%, or loaning it out to clients at higher rates gave the Japanese banks a nice way to profit for the last few years...helping to offset the hidden losses that were piling up since the early 1990's due to bad loans made to real estate speculators etc. Unfortunately, the Life insurance companies did not partake in their Free Money scheme offered by the Japanese government. Worse yet, they were forced into buying worthless government paper (Japanese Govt Bonds) which have been yielding below 2% for the last few years rather than the 4-6% needed by the Life companies. The Japanese Government have also made it clear to all Japanese institutional investors that they are not to sell JGBs wantonly. A sudden exit from the JGB market by too many large investors would give the game away. JGB yields would ratchet higher to 4% in a heartbeat, and in the process take down some banks and insurance companies. But if several more large Life Companies and banks go bust, the end result would still be chaos in the Japanese financial system. This Japanese Government Ponzi Scheme of wantonly manipulating the bond market, forcing Japanese Institutions to hold worthless govt paper, is not going to work any better than the pork barrel politics (wasting over $1 trillion to support the stock market) did with the stock market. The Japanese Government is only diggiing a deeper hole which they will have a very hard time climbing out of. Daihyaku will not be the only Life Insurance company to go bust. For those of you who have pulled down our daily report on Japanese Yen, you will have noted that this week is a "Panic Cycle Week." The dollar found support just above the 200 Day Moving Average and started to rally. This rally is likely to continue and grow more powerful and finally draw investors' attention. More bad news from the Japanese financial sector is coming. This could lead to chaos. But you're wondering, "Why should I care about Japan?" You are probably more focused on your stock market portfolio. Well, watch this space!!! You may soon learn how events half-way around the world can have a huge impact your your US or Euroepan stocks. Some might be tempted to believe that chaos in Japan will cause a capital flight to the USD, which might be good for US stocks.....Yes...and No. Yes, we are expecting a strong move into US Dollars, but it may not have a positive effect on US stocks, at least not initially. Chaos in the second largest economy's financial sector could quite easily cause nervousness around the world. You cannot predict all the consequences of a financial panic. Smart Money will retrench and wait for better prices at lower levels. Those who believe the economy is slowing down and that the FED will not raise rates more than one more time, are perhaps right, but for the wrong reasons. They believe in the soft-landing. These people who believe in a soft-landing ignore the fact that inflation is brewing as witnessed by auto insurance premiums that are rising at double-digit rates in many parts of the US. As witnessed by health-care costs that are also rising again. As witnessed by oil that can't seem to stay below $30/bbl on Nymex. As witnessed by a broad based commodity rally (see the CRB). As witnessed by record low unemployment levels and rising labor costs. No matter what tomorrow's figures bring, inflation is not going to go away. We are just now starting a commodity bull market that will take us higher into 2007. What many overlook is that a Nasdaq correction is actually inflationary. Employees who were previously quite happy to take much of their compensation in stock options will not be so happy to continue to do so. Keep one eye on inflation...not as reported by economists, but what you can see for yourself. Keep the other eye on Japan. The Nikkei looks as though it may want to rally for a few days, but I'm not convinced that this is anything more than a "reaction rally." setting up for the next leg down. See our daily reports for precise levels and timing. Keep one eye on Japan even if you don't own any Japanese stocks. Events in Japan may soon impact the US and European markets. Though a longerterm consequence of chaos in the Japanese financial markets may be to drive capital to the US. The short term consequence may to shake investors' confidence, whether they be in Europe, Japan, or the US. "Its a Small World Afterall!" If you are trying to access our site using a previously saved bookmark you will not be able to enter. There was a change to our server last fall. You will probably be able to access the site if you type in the address again (pei-intl.com) and then resave the bookmark. IN ORDER TO PULL DOWN A REPORT FROM THE WEB >From the PEI homepage (www.pei-intl.com), click on registered user; enter ID and Password; click on Forecasting; click on PEI Forecasting Reports; click on Access Units - Access Current Reports; choose market of your choice from drop boxes; click on GO. If you haven't already done so, take advantage of your 5 Free Access Units. Once you have used all 5 units, you may wish to consider purchasing units. To purchase access units click the purchase accept units buttons rather than access current report. If you have forgotten your Password, reply to this email. It may take a day or two to get a response.