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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (238)	12/29/1997 2:24:00 PM
From: Jack Clarke	Respond to of 9980

Zeev: Thanks. Speaking of Asia, what do you make of private banking officials walking out on the NY Fed meeting about Korea? biz.yahoo.com I haven't seen that mentioned on any of the SI threads I follow today, so wonder if it is of any significance. Maybe I am making too much of it. Perhaps the meeting just came to an end. The notice was phrased in an unusual manner, to my ear. Jack

To: Zeev Hed who wrote (238)	12/29/1997 2:36:00 PM
From: Joan Osland Graffius	Read Replies (2) \| Respond to of 9980

Zeev, >>The US is certainly not interested in seeing an inverted yield curve which would have happened if the Japanese were not net sellers. It is what is happening at the margins that count. I have been thinking about the affect the Japanese are having on the bond market. If I ignored the Japanese selling of bonds would we have an inverted yeild curve...maybe; or is it the asian problems in total that have caused the current yeild curve. Just what is prudent thinking when trying to understand the current bond market and yeild curve? Joan

To: Zeev Hed who wrote (238)	12/30/1997 10:22:00 PM
From: k.ramesh	Respond to of 9980

So it is just dumb luck that the US happens to be in a state where deficits are going down.Imagine the Japanese trying to sell their bonds when deficits are rising. But still if you were a Japanese bank holding US treasuries, You have to wonder, are these IOU's any better than the worthless won paper you are sitting on. Neither can be unloaded when you are in trouble and want to unload 'em. Somewhere along the line the debtor becomes more powerful than the creditor. Also we need to rethink some notions of safety in a world awash with information. By the time the newspapers and TV tell you which is a safe haven, it is already priced into the safe haven, eg Baby bell stocks recently, or US treasuries. If just the hint of the Japanese selling US bonds is going to cause the prices to fall, it hasn't been such a safe deal for them from an investment point of view. It may have been the only way to keep their export machine going though. Ramesh