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To: Elllk who wrote (8749)	11/20/1997 6:38:00 PM
From: Defrocked	Respond to of 18056

Source:Bloomberg "So.Korea to Seek Up to $60 Billion From IMF" from YTN,the state-owned Yonhap Television news, citing unnamed sources. Economy Minister Lim Chang Yuel also quoted as saying the bailout fund was "inevitable" following meeting with Stanley Fischer, IMF Deputy Managing Director. Will So.Korea finally post a rally tonight??? Thanks, Larry, for the Brazil update. Missed that action today.

To: Elllk who wrote (8749)	11/20/1997 6:50:00 PM
From: Rational	Read Replies (1) \| Respond to of 18056

Larry: I have been saying that the Japanese Govt has no alternative but to use public money in the banks. The market believes so. The PM could not say YES until some committee approved of it, because this is a very risky strategy for Japanese taxpayers and that the PM may come under fire from critics. To make sure that the market did not slide as a result of his comments, the PM or someone must have called the ex-PM to approach the PM to consider the proposal so that the PM comes out clean. These are all political tactics. The bottom line is that Japan has no alternative but to infuse public funds. However, this will not necessarily make banks profitable since their cost of funds cannot be reduced any further. Japanese banks basically borrow public money at 1.5% and invest in US Treas at ~5%. Interest rates have remained low because the Japanese huge trade surplus has gotten into the Treasury market. This has also kept the US stock prices up, while driving down the Japanese stock prices. When will this artificiality be broken? If some Japanese banks fail despite the preferred equity infusion, the Japanese Govt will have no more option left, but to fall into an inflation-induced recession. This will be a disaster for markets world-wide, IMO. If the Japanese banks come back to profitability, then there will be no disaster. Sankar