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To: Tom Byron who wrote (9146)	4/1/1998 12:44:00 PM
From: kingfisher	Respond to of 116753

James Cramer begs to differ! Wrong! Tactics and Strategies: Cramer Confesses: Barton Biggs Is Right on Japan By James J. Cramer 4/1/98 12:14 PM ET Barton Biggs is going to be right. They taught me at my college paper never to bury the lead, and the lead is that Biggs, a notorious bear on Japan, will make you more money than my positive stance on that country. Oh, I tried. I thought we had a potential for a big rally in the Japanese financials, as the balance sheets got cleaned up and the bad loans got priced and removed. I thought that Japan had reached a consensus that something big had to be done. But when I look at what's been done -- chronicled incredibly well by David DeRosa's remarkably RIGHT column in TSC -- I know it is pathetic. I had thought that you could make good money being long an index that mirrored the Nikkei. But now with the world's equity markets on a first-quarter tear, the underperformance of Tokyo is too much for me, someone who demands immediate satisfaction, to take. Oddly, though, I got defeated not by my facts. The Sakura selloff, the Sumitomo sale, the bank downgrades, they've all played out exactly as I predicted. In fact, it is why I maintain a small position over there. But what I blew, or, less emotionally and more accurately, what I misjudged, was the currency. Put simply, I think the yen is in the fight for its life. I had been musing that this currency is about as sickly as I have ever seen, and then Ron Insana, who is quietly doing some of the most brilliant work on television at CNBC, brought up the thesis yesterday of hedge funds going against the Japanese central bank to break the currency, in the same way they went against the Thai baht, or a few years back, against the British pound. At first I thought it fanciful. The U.S. government would never stand for it. But when I looked over the last half-dozen statements emanating from Washington by Rubin and Summers, I realized that these guys have given tacit approval of a run against the yen by their constant berating of the Japanese central bank. Japan has massive reserves, but this currency is overvalued by probably 50 yen to the dollar. Talk about a pincer move: We threaten to block exports from Japan domestically, while international hedge funds bang the yen to 175 or 180 on the dollar. That would force structural change on Japan as its exports would pile up, courtesy of tariffs, and Japan would at last have to stimulate domestic demand with tax cuts. The preferred instrument for this play would be to short, in yen, the Japanese long-bond equivalent (JGB) where you would not owe very much because the coupons are so low to begin with. You can just accrue gains on the currency collapse! A final spike in interest rates, courtesy of a domestic demand rush fueled by tax cuts and a ballooning Japanese government deficit, might just be the coup de grace. Me? I'm just pricing out yen puts. Too much money has been lost shorting Japanese long bonds for me to be so bold as to call a top in those. But wow, what a call. A break-the-Japanese-bank call would be as big as they get. And probably good for everybody except the troglodytes who run that country. James J. Cramer is manager of a hedge fund and co-chairman of TheStreet.com. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Mr. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he welcomes your feedback, emailed to Jjc@thestreet.com. See Also WRONG! TACTICS AND STRATEGIES ARCHIVE ÿÿc 1998 TheStreet.com, All Rights Reserved.TOPÿÿ\|ÿÿABOUTÿUSÿÿ\|ÿÿCONTENTSÿÿ\|ÿÿSUBSCRIBEÿÿ\|ÿÿADVERTISEÿÿ\|ÿÿTRADEÿONLINEÿÿ\|ÿÿFEEDBACKÿÿ\|ÿÿSEARCHÿÿ\|ÿÿHELP

To: Tom Byron who wrote (9146)	4/1/1998 2:56:00 PM
From: Crimson Ghost	Read Replies (1) \| Respond to of 116753

Tom: Have not seen this interview, but Bergsten has long advocated a cheap dollar -- especially versus the yen. By contrast people like Martin Armstrong and money manager James Cramer muse about forcing Japan to bow to US dictates by pushing the yen down sharply to 175-200. We do indeed live in interesting times.

To: Tom Byron who wrote (9146)	4/1/1998 6:24:00 PM
From: goldsnow	Read Replies (3) \| Respond to of 116753

"Also, Japan Finance Minister Hikaru Matsunaga said the yen's fall was undesirable and warned Japan would respond in a timely manner. The market will begin to grow skeptical of such comments because past defense of the yen and rumors of intervention by the Bank of Japan have had unsustainable impact, said Diego Giurleo, vice president of treasury at Royal Bank of Canada. " infoseek.com