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

To: Rational who wrote (8886)	11/21/1997 3:43:00 PM
From: Cynic 2005	Read Replies (1) \| Respond to of 18056

Sankar, Bull or Bear is OK as long as one knows what he/she is doing. But, there are "head in the sand" bulls and bears. Often, they are the most noisy ones. I try not to be one of them. -Mohan

To: Rational who wrote (8886)	11/21/1997 6:50:00 PM
From: Tommaso	Read Replies (1) \| Respond to of 18056

Hi Sankar! There is a story in the business section of todays's Nerw York Times about the problems in Japan. In it, an economist is quoted as saying that if the Nikkei index fell to 12,000 it would cost 60 billion dollars (not yen) of capital to rescue the Japanese banks and make them solvent. The Japanese hold 800 billion worth of US treasuries. So a very pessimistic estimate is that less than ten percent of the total of US holdings would have to be liquidated to equal that figure. I had begun to consider selling the US Treasury strips in my wife's IRA account (which have done very well since I bought them). But now I think I will leave them alone. I think there might be more likelihood of continued flight to quality than panic selling of U.S. treasury bonds. That's not to say that we would hold them until the year 2013, but it seems not to bad a gamble to hold them in case of a huge US stock bear market. Maybe the transfer of funds from stocks worldwide would more than cover any sales the Japanese might make. I wonder what you or anyone else thinks of this reasoning.