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

To: Stitch who wrote (2864)	4/3/1998 12:46:00 PM
From: Daniel Chisholm	Read Replies (1) \| Respond to of 9980

I don't think stimulating Japanese consumer spending would fix their problems, because I don't think a lack of consumer spending is at the root of Japan's problems. (To be fair, I've never been convinced that simply a lack of consumer demand is what ever ailed any economy) I've been wondering if Japan's status as the world's largest creditor might be a bit of an illusion. Could the situation be that although they (as a country) have a lot of foreign assets "on the books", a great portion of those might perhaps be offset by domestic "off the books" liabilities (e.g., unacknowledged but very real loan losses)? (I would like to stress that I think that lumping all Japanese assets and liabilities together is very sloppy - the divisions between who owns what, who owes what, and who is owed what, and the (currency) denomination of these relationships, will have a very important influence on how events unfold. I don't claim to have a good handle on these things, it's just that I wish I did!) W.r.t. whether or not Japanese consumers are "rational" in the economic sense, if they feel doubtful about their personal economic situation, would they not be rational in not responding to measures aimed at getting them to spend and consume more, but rather investing their saved wealth (more?) productively? What happens if the government wants to use the Postal Savings for various stimulative measures, at the same time as the depositors decide to invest their savings elsewhere, perhaps not even in Yen? An initial interpretation to this might be that with the onset of the Japanese Big Bang, newly-deregulated (somewhat) Japanese savers will now be able to invest in more (relatively) attractively valued U.S. assets (T-bills, bonds, stocks) - particularly if one feels that further Yen devaluation is likely. Considering that U.S. assets would perhaps be seen to offer (relative) value is somewhat amazing (!). More like a lesser of disvalues, perhaps? The interesting thesis (I think) by Stratfor that the Japanese behave according to custom rather than law throws an interesting wrench in the works. Can we expect the Japanese to by and large refrain from taking advantage of their (on paper) new-found deregulation? Might such economic patriotism, disregarding their personal well-being, perhaps be even more damaging to Japan's national wealth and long term well-being? If a near-term Yen or Nikkei collapse is avoided in this manner, what about Japan's longer term prospects? Can they delay and deny, and eventually succeed in cleaning up (even though this has not appeared to work so far)? - Daniel P.S. My first post to Asia Forum, but I have been lurking for some time now. I think the quality of the posters and the discussions here are absolutely first rate! P.P.S What's the final story on Cramer's TheStreet.com article agreeing with Barton Biggs? It sounded reasonable to me, but it was published on April 1st and it did seem to be counter to what Cramer had earlier posited (a 1998 rally in Japan). April Fools, or did Cramer change his mind?