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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (43877)	3/25/2002 7:23:34 PM
From: ajtj99	Read Replies (3) \| Respond to of 99280

Zeev, the fact that they even mentioned it is pretty big, as they have not used that term before in meeting minutes. I think we might see them act in this manner if we get a double dip. By the way, it is amazing that people are talking about interest rate hikes so soon after talk like this in January. It may indicate that the Fed may not hike rates as quickly as we thought they might. They may wait until June instead of raising in May like many are expecting.

To: Zeev Hed who wrote (43877)	3/25/2002 8:16:58 PM
From: ChrisJP	Respond to of 99280

Banks on the Run? A panic could follow Japan's move to lift insurance on deposits In increasingly dour Tokyo, one joke has been making the rounds. What is the difference between Argentina, hit this winter by a financial crisis, and Japan? The answer: two years. Some analysts think even that could be generous. Earlier this month, Moody's Investors Service said it may downgrade Japan's debt below that of Botswana, an AIDS-wracked African country where average life expectancy is 37. One major reason: On April 1, Japan's debt-ridden government will remove deposit insurance on many bank accounts, a move analysts worry may precipitate a run on weaker, small banks and trigger a broader financial panic. Gold bugs. Though the change affects only accounts worth more than 10 million yen (roughly $76,000), fear has already set in. Some Japanese have begun hoarding gold, sometimes lugging bags of bullion out of gold shops and into their homes. Meanwhile, many banks and private consumers have gone into business with the yakuza, organized criminals who have borrowed heavily from troubled financial institutions. Given this confluence of bad news, Kenneth Courtis, vice chairman of Goldman Sachs Asia, predicts that this year Japan will face chaos worse than any financial meltdown since the Great Depression. Already, unemployment has reached a record high, and the government has introduced make-work schemes such as catching snails and counting deer droppings. Crime rates are skyrocketing in cities, as yakuza assault bankers who call in debts. Japan experts say that some Japanese have been forced to sell kidneys to pay off these shady loans. Though Japanese Prime Minister Junichiro Koizumi has outlined an economic reform package, many analysts say he is proposing only cosmetic changes. Yet as the insurance deadline looms, the White House has restrained from prodding Koizumi, in part because Japan has resolutely backed the war on terror. "Koizumi is now the [Yasser] Arafat of economic policy," because he won't act but can't be abandoned, argues Adam Posen of the Institute for International Economics. Washington can't wait much longer. "The U.S. has a real national security interest in keeping Japan from financial crisis," says Posen. If Japan, the major investor in Asia, falls apart, its collapse could destabilize other countries in the region. Though no one expects the world's second-largest economy to disappear, even a modest meltdown could have global repercussions. Japanese banks and insurers hold massive amounts of U.S. securities, while its companies have opened numerous plants in America. Arthur Alexander, former head of the Japan Economic Institute, says that if Japanese banks and companies go bankrupt, they could be forced to sell their foreign holdings. That would wreak havoc on the U.S. financial system. Meanwhile, Japanese companies face an added threat that they did not in earlier gloomy periods: low-cost Chinese producers, which are forcing Japanese firms into bankruptcy at a record pace. usnews.com Chris