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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (40110)	7/2/2001 7:19:46 AM
From: IQBAL LATIF	Respond to of 50167

Sometime any amount of rate cuts does not work, Japan is one clear example, it is never a chance that key leading indicators are robust, too much of saving and too much of a trade positive surplus and a current account surplus becomes the biggest negative. Consumer credit and consumer spending are key issues in a growing economy, improvement of leading indicators and continued good news on housing is something that Japan has been waiting for last 10 years but to no avail, neither very loose monetary policy nor huge government spending has been able to replace entrenched insecurities of Japanese consumer and structural imbalances where economic production discourages 'destruction' of inefficient entities. The very strength of US markets to shoot first and ask question later is the basis of that recovery that are imminent from lows of 1616 on Naz. The Bank of Japan's (BOJ) ``tankan'' short-term survey produced a headline figure of minus 16 for the sentiment diffusion index (DI) reading for large manufacturers, diving from minus five in March, when the DI worsened for the first time in nine quarters. The figure was the worst since the minus 17 posted in December 1999, but was not as grim as some had feared and matched a median forecast in a Reuters' survey of economists last week. The tankan index subtracts the percentage of firms reporting unfavorable conditions from those with favorable responses. A positive reading means optimists outnumber pessimists. It is closely monitored by markets for clues on monetary policy. Monetary and fiscal policy does not work in void economies, the most efficient way to govern a government is to reduce taxes and bring the interest rates down, now that can only happen if government the most inefficient user of public funds is off the back of the people and inflation fears are receding. Crony capitalism and 'brotherhood capitalistic' structures are at the opposite end needs continual supply of fresh blood from state, like in Japan we see in shape of incentives and government backed projects that kind of strategy took a long time to bring US out of depression in 1930's. Corporate reliance on capital markets is one strength of US economy, the VC approach where billions burn and the venture goes bust without impacting the strength of the financial institutions. VC and risk capital is one of the strength of the US and Anglo-Saxon based economies and that is also one other big distinction that a comparative student of Nikkei/Naz should study closely. Geography and demographic increase also plays a very important role, on count of geography and demography some nations are handicapped, Japan is one example the pro-creativity is shunned and standard of living remains stuck up to a lower middle class country as space limitations apply. Some have been calling the strong economic numbers as a fluke, but I think they are reflective of the strength US economy has in re-discovering its strength once it slows down. I would in 15 days be looking at higher yields on long bonds as US economy comes out of this period of slow down; the long money is already indicating where next level of money can be made. I would like to see bonds out and stocks in for 30-45 days window of opportunity that may begin from 25th July to say end Aug, Oct doldrums are sure this time also. finance.yahoo.com^TYX&d=c&k=c3&p=m50,m100,m200,m10,m20&t=3m&l=on&z=m&q=l