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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: John Hunt who wrote (8100)	11/16/1997 1:40:00 PM
From: Rational	Read Replies (4) \| Respond to of 18056

John, I expect the dollar to go down and the US over-night (repo) interest rate to inch up as the Japanese sell their US Treasuries (like the HK Central bank did). There will be jitters in the US market's interest rate sensitive stocks. I do not think, on Thursday, Greenspan knew of the Japanese plan to sell US Treasuries, when he commented about the minimal impact of SE Asian turmoil on the US economy. He correctly assumed that SE Asian Central Banks' selling US Treasuries could do no harm to US dollar. Further, he correctly noted that SE Asian currency problem has stabilized and that US businesses will have minimal effect. This lifted the tech stocks on Thursday and Friday. The Japanese have to prop up their banks' balance sheets to have them continue international banking by improving their precipitously fallen capital levels. The BOJ cannot reduce the interest rate below 1.5% (?) to return profitability to Japanese banks. Japanese will have to sell a lot of their $800 bil US Treas, before Wed, to ensure that their banks' capital levels are OK. This is a real threat to to US$. Sankar

To: John Hunt who wrote (8100)	11/16/1997 3:50:00 PM
From: Haim R. Branisteanu	Respond to of 18056

Markets action usually are, - buy the rumor sell the news. The selloff will be before and after the anoucement a relief rally. Haim

To: John Hunt who wrote (8100)	11/16/1997 8:10:00 PM
From: Mark Nelson	Respond to of 18056

John, Interesting article. It states, "In the first fiscal half year ended on September 30, Japan's top 20 banks posted 2.6 trillion yen ($20.8 billion) in valuation losses on their shareholdings after the Nikkei had fallen to 17,887 from 18,003 at the end of March this year." So, if the banks post a loss in valuation of US$20.8 billion with a drop of 130 points in the Nikkei (20.8 billion/130 points=180 million/point), a further drop to current level of 15082 (17887-15082=2805 points) would imply a further valuation loss of 2805 x 180= US$504.9 billion ? Mark