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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (7442)	8/21/2001 8:01:27 AM
From: KyrosL	Read Replies (1) \| Respond to of 74559

>>like General Westmoreland of WWII fame, "I will return" I thought that was General Terminator in WWII and he said "I'll be back" Kyros (setting history straight)

To: Maurice Winn who wrote (7442)	8/21/2001 10:02:36 AM
From: edward miller	Respond to of 74559

It was General MacArthur. Westie was in the Vietnam war.

To: Maurice Winn who wrote (7442)	8/21/2001 11:36:09 AM
From: TobagoJack	Read Replies (1) \| Respond to of 74559

Hi Maurice, scarily enough, the thought of starting to punt Tokyo occurred to me recently as well, but, I think, it would really not hurt to hold fire for a bit longer, given that I believe the US and therefore world market will break soon. I know you do not hold the same belief as I and so may see the green light on punting Tokyo. I think "hold fire" is the game theory thing to do. To complement my position in Global Crossing debt, today I got execution on a tranche of British cable TV company (MSFT/Gates has a chunk of this near-death company) NTL 2008 6.75% debt for USD 53.50 today. Little by cautious little, Jay moves forward, weapons at ready:0) The following is, in my view, an accurate report on the state of mind of Asia minus Austrasia ... interactive.wsj.com QUOTE August 21, 2001 Money & Investing Asian Markets Will Likely Take Little Notice of a U.S. Rate Cut By KAREN RICHARDSON Staff Reporter of THE WALL STREET JOURNAL HONG KONG -- Annoyance, and not anticipation, is the prevalent emotion in Asia ahead of the U.S. Federal Reserve's interest-rate-setting committee meeting Tuesday. While U.S. interest-rate cuts were once viewed as a panacea for what ails the world's biggest economy and the Asian countries that feed its enormous appetite for imports, a potential seventh U.S. interest-rate reduction this year is already being discounted by Asian stock markets, which perceive another quarter-percentage-point trim as largely a nonevent. In fact, with Asians likely to stash much of their savings in bank deposits, a rate cut means less investment income, first and foremost. "Most Asians are taught to spend out of income, not capital," said Dio Wong, equity strategist for the Asian-Pacific region excluding Japan at Merrill Lynch. "If you cut interest rates further, you're more likely to annoy people because you're effectively reducing the disposable income of the consumer." It took six Federal Reserve interest-rate reductions this year before Asian bond prices experienced much of an upward nudge, and stocks in much of the world have continued sinking as economic growth slows dramatically. Not surprisingly, Asian investors aren't about to bet the farm that one more U.S. rate cut will turn the global economy around on a dime. "I don't think markets are going to react very enthusiastically" Tuesday if there is a rate cut, said John Dolfin, regional equity-strategy analyst at J.P. Morgan. Mr. Dolfin and other strategists say stock investors will stay on the sidelines until they see real signs of growth. "Thus far this year, interest-rate cuts have been steep and they've promised a lot, but we haven't seen those promises fulfilled yet in the [gross domestic product] numbers or in the industrial-production numbers," Mr. Dolfin said. Despite a rally in U.S. bond prices as interest rates fall, domestic-currency bonds in Asia haven't seen much relative price action because some governments have been wary about lowering interest rates and putting their currencies in peril. In Thailand, the central bank raised interbank rates last month, sparking fears of a rise in long-term interest rates and a consequent fall in bond prices. Meanwhile, banks are weak in many Asian countries, and in most Asian economies banks are flooded with deposits they are loath to lend to debt-laden companies. Some Asian market analysts are growing increasingly bearish about a consumer-led U.S. economic recovery, despite rosy predictions by U.S. economists at brokerage houses that a fourth-quarter comeback is in sight. A raft of weak earnings reports for the second quarter accompanied by gloomy profit forecasts and massive layoffs could portend a weak Christmas sales season this year. That's not good for Asian economies, which are the Christmas-gift makers to the world. "You can usually expect a shift out of bonds into equities three or four months before economic recovery gets under way. But the fact that we're not there yet indicates some of the expectations for a U.S. economic recovery by the fourth quarter were over-optimistic," said Raja Visweswaran, head of Asian debt research at Bank of America Securities. Analysts have largely abandoned hopes that domestic demand will soon develop enough momentum to lift Asian markets out of their dependence on the export-manufacturing sector. Some say the recent softness in the U.S. dollar against many Asian currencies is only temporary, because exporting Asian countries will suffer until the U.S. and global economies revive. "The fundamentals are still intact for a longer-term depreciation of local currencies relative to the dollar," said Jason Press, Asian-Pacific strategist at Goldman Sachs. "Long-term investors should overlook this temporary weakness [in the dollar] and focus on a global recovery." Write to Karen Richardson at karen.richardson@awsj.com1 UNQUOTE Chugs, Jay