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To: Rarebird who wrote (27233)12/30/1997 2:20:00 AM
From: BillyG  Read Replies (3) | Respond to of 50808
 
Chicken Little, you said:

If the Japanese Government announces a preferred dividend rate (which is a guaranteed rate of interest ) that is higher than the yield on Treasuries, do you really think that the Japanese financial institutions and other investors wouldn't sell their US Treasury holdings?

Do you really think that investors are stupid enough to equate preferred stock in Japanese financial institutions as equivalent to investments in U.S. Treasuries, just because the interest rate on the preferred may be higher than the rate on Treasuries? What about the major difference in *security of principal* in Japanese stock versus U.S. Treasuries?

At least try to be realistic with your scare talk, Chicken Little (the sky is falling . . .)



To: Rarebird who wrote (27233)12/30/1997 7:22:00 AM
From: CPAMarty  Respond to of 50808
 
Rarebird, i think Billy's point on the difference in risk between U.S. Treasuries and perferred stock in Japanese banks is a valid one. anyway if yeilds were the only issue, why invest in U.S.Treasuries at all? Also, it was mentioned on CNBC yesterday the the U.S might run a 50 billion surplus next year, this would reduce the supply of Treasuries. The Japanese government is not exactly know for making reckless moves, one would expect a slower more cautious approach


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