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

To: Jack Clarke who wrote (492)	1/6/1998 9:25:00 AM
From: pcyhuang	Read Replies (1) \| Respond to of 9980

Japan's MOF's futile effort Jack, Referring to your message that Japan MOF is attempting to limit short sales, the MOF should realize that in today's highly nternationalized market, such effort is largely futile. Because such tactics would only drive the business offshore. With a large number of negotiated derivative instruments available, the large shareholder/insider can always book a deal with a foreign bank -- in Hongkong, for example -- to achieve a given desired short position. pcyh

To: Jack Clarke who wrote (492)	1/6/1998 10:30:00 AM
From: Rational	Read Replies (1) \| Respond to of 9980

Jack: As I have always felt all that Japan wants/needs is higher stock prices. They do not care much about declining yen (they may be liking it because it improves exports); though this is the result of a weaker stock market stemming from lower corporate profits and lower domestic consumption. They may eventually cut taxes. The main development I see today is that investors are shifting from long bonds to short bonds. They will then move to US$ cash and then to Asian bond markets, followed by stock markets. Sankar

To: Jack Clarke who wrote (492)	1/6/1998 1:38:00 PM
From: Geoff Nunn	Read Replies (3) \| Respond to of 9980

Doesn't such market manipulation destroy confidence in the markets and lead people to head for the exits? Also I've heard of laws against starting rumors and other Asian countries making speculation illegal? What they really want to do is make a law that says stocks always have to go UP.<g> Jack Jack, The question I would want to ask is: are Japanese officials ignorant of basic economics? You provide anecdotal evidence that it is. There is more. 1. Yesterday, the Wall Street Journal ran an op. ed. forum, "Can the U.S. Weather Asia's Storm?" The editor asked twelve prominant business leaders and analysts to offer their comments. With but one exception, all of the comments were interesting and well thought out IMO. The exception was a spokesman described as chief diplomatic correspondent of the Japanese newspaper Asahi Shimbun whose comments were notably pedestrian (i.e., the U.S. should play a role of "importer of last resort", Japan cannot be allowed to trigger another Great Depression, etc) 2. The U.S. demonstrated years ago the tremendous benefits that derive from deregulation of securities markets. Yet Japan, more than 20 yrs later, is still playing catch up. 3. The U.S. demonstrated yrs ago the tremendous benefits to consumers that airline deregulation and greater competition brings. Yet, even today Japan drags its feet on opening its markets to price competition and freer entry. 4. The U.S. in the 1980's demonstrated for all the world to see the tremendous benefits to be derived from breaking up monopoly and introducing competition into the Telecom market. Yet, in Japan this industry remains a gov't monopoly even today. 5. The BofJ' extremely tight monetary policies, combined with failure of the gov't to provide fiscal stimulus to alleviate the recession, suggests that Japanese officials learned nothing from the U.S experience with the great depression. 6. Japanese officials seem to have learned nothing from the successful use of supply side economics practiced by the U.S. gov't in the 1980's. One can argue about whether the U.S. public debt at the end of the decade would have been higher or lower wihtout the supply side approach. There is no arguing about the benefits of the stimulus effect, i.e. the longest uninterrupted peacetime expansion in U.S. history. Food for thought. GN