To: Haim R. Branisteanu who wrote (7184 ) 11/6/1997 9:22:00 PM From: Zeev Hed Read Replies (1) | Respond to
Haim: The last time I checked this (about twio years ago) it was between 13,000 to 13,500. That is when their "combined portofolio" of securities (average so some will have no problems but other must already be on the brink, last week, a major brokerage went under, the tip of the iceberg) will get them to decline below minimum reserves (substitute liquid assets there count as reserves). I have no idea to what extent they have reliquified themselves. I have not seen much writing down of inflated real estate assets and that is still, IMHO, the major albatros over their "combined balance sheet. They cannot liquidate these real estate assets near wht they are carried on the book, and thus stocks will probably be liquidated. However, I think that BOJ will not let that happen, and start selling our bonds to inject liquidity into their system and that is when I expect the real party to come to town, a surge in long term interest rates (while every one expect a deflationary induced decrease) which will smash the market. After that exercise, the bond will, I think come back down to reflect those deflationary pressure, but that might serve as a double whamo on our equities market, first rates going up, thus breaking some major technical support to equiyies, and then the creeping fear of a dflationary wave inducing a recession.
