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To: Michael who wrote (8580)	3/20/1998 11:19:00 PM
From: PaulM	Read Replies (2) \| Respond to of 116801

Hi Michael. Thanks. My view is the plain vanilla Japan-will-repatriate, call in loans and liquidate on a huge scale when things get tough enough. The world's bond, stock and real estate markets will know. 1. Re: BIS standards IMO for all practical purposes Japanese banks haven't complied for some time, with changed accounting rules and other steps taken to paper this fact over. Many of the worlds largest banks have negative capital. It's just a question of when they are unable to make a current payment or satisfy a depositor's demand. 2. Re: govt steps, I never have much faith in those. They put off the inevitable until a later day, but I think Japan's "later day" has come. 3. Re: the big bang and currency flows, the flow of money out of Japan will intensify as long as investors have a choice. This will aggravate liquidity problems in Japan, until a full blown liquidity crisis leaves Japanese investors with no choice, except to liquidate. Then the flow will reverse. 4. I suspect all of this will happen, despite a coming 200 yen to the dollar exchange rate. I would never predict a financial collapse in the "short term." But the combination of year end March 31 and Big Bang April 1 may be more strain than Japan can handle. And now is as likely a time as any for these events to be set in motion. JMO.