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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Yamakita who wrote (4902)	3/13/1998 1:07:00 AM
From: Joey Two-Cents	Read Replies (2) \| Respond to of 18691

They can't, because to compete they must devalue, and to devalue is to cause the world financial system to unwind. 40% of Japan's exports go to other Asian countries. Although the Yen has declined against the $. The other Asian countries have had their currencies decline much more. Japans trading partners have lost much of their wealth in the last year. There's food riots in Indonesia, foreign good boycotts in Korea. They're not buying Japanese goods. The Japanese consumer isn't buying Japanese goods (consumer spending declined 5% in December). This all come at a time when Japan's banks are in a credit crunch. Who are the Japanese going to sell their goods to? The US? How long do you think that'll last? The Japanese government has agreed to pump billions of $'s into the stock market so that on 3/31/98 Banks can meet Risk Based Capital requirements. Their banks are in such a credit crunch that some business have to borrow money at 20%. This while they pay depositors at a rate of 1/2%. Add to this that on 4/1/98 the markets are suppose to be deregulated and people will be allowed to move money where they can get the best return. That's $ 2 Trillion leaving Japanese to get better returns. Somehow I think the Japanese government may decide to postpone the reforms (causing more panic). Remember this is the same government that decided to raise taxes last year when the economy was contracting. Read the links in my past posts it tells the story.