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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: GROUND ZERO™ who wrote (9714)	11/15/1997 6:04:00 AM
From: Jack Clarke	Read Replies (1) \| Respond to of 94695

GZ: RE: buying the Asian markets, see my post of this AM on the Mohan thread: techstocks.com I'm not saying you're not right. Just some dissenting opinions. Jack

To: GROUND ZERO™ who wrote (9714)	11/15/1997 11:07:00 AM
From: John Dally	Read Replies (1) \| Respond to of 94695

Hi GZ, Sorry to read that you've switched teams! -g- If you believe that "Japan is still having their problems and will be a buy around 12,000;" don't you think there will be repercussions on WS? (I.e., I'm waiting for Japan to hit 12,000 before I buy on WS.) Also, re Japan, here's an excerpt from yesterday's WSJ: Beginning next week, Japan's top 20 lenders will release earnings for the six months ended Sept. 30 under this country's hitherto murky disclosure standards. But the banks will also forecast what their books will look like next March, when Japan is scheduled to adopt the same stringent reserve standards used by banks in the U.S. The new rules will require banks to set aside capital against the risk of default for even healthy loans, a prudent measure that unfortunately will cost banks a lot of money. Sumitomo Bank, for example, said the stricter reserve requirement would force it to record a loss of more than $3 billion for the year ending March 31. When the bank cut its earnings forecasts last month, credit-rating agency Standard & Poor's immediately lowered the bank's long-term credit rating to A-minus from A, affecting more than $8 billion in debt. The move was highly unusual in that the agency moved without giving Sumitomo and its investors the normal warning period. The agency said the downgrade was based, in part, on the possibility of new losses on Sumitomo's loans "both in the domestic market and in other Asian countries." The earnings season is likely to flush out other problems. Hokkaido Takushoku Bank Ltd. was forced to withdraw from overseas markets this year because its write-offs depleted capital to the point where it couldn't meet internationally agreed-upon reserve requirements of 8% of loans and other so-called risk assets. Now, with the bank's balance sheet deteriorating, its officials won't comment on rumors that the bank will need an emergency equity injection to meet even Japan's looser 4% capital requirement for banks that only operate domestically. Investors will know more when the bank releases earnings next week. The ultimate solution, many say, lies in a move that Japan's regulators and politicians have desperately sought to avoid: The injection of trillions of yen in public money. As the Nikkei average was sliding this week, eroding the value of banks' share portfolios, the enormously unpopular subject suddenly surfaced again in Parliament. Kimio Yamaguchi, the director of the banking bureau at Japan's Ministry of Finance, set the stage for the unpopular move: "The public needs to debate this topic thoroughly," he said. And if Japan's politicians work up the courage to move forward, then it finally may be time to buy. BTW, congratulations on your great calls on bonds!!!! Best regards, John.