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

To: Michael Sphar who wrote (3041)	4/11/1998 3:59:00 AM
From: Stitch	Read Replies (2) \| Respond to of 9980

Michael, <<So is this currency action a knee jerk reaction to Moodys ? Will it help them somehow respark their economy ? I'm pretty dense when it comes to all this international stuff so go slowly will ya.>> You have asked the blind to lead the blind but I am never shy about commenting. Your list of events, by the way, is the first inventory I have seen like that and becomes quite a parody when read that way. Problem is that is is the truth. So one can surmise that the Japanese et al have as much difficulty in discerning a clear strategy as any large politically driven collective would. As I understand it the idea behind the tax cut is to stimulate internal consumption which is seen as the big bad bear in their economic woes. Note, while the U.S. consumer confidence numbers in the U.S. recently rose again, Japan's is likely to be considered at an all time low though I have not seen numbers and don't even know if they count it. The tax raise you mentioned is now seen as a huge error. That is why there is already a hue and cry because the most recent cuts have not been announced as permanent. I think there is an ultra strong aversion to deficit spending in Japan because it is an Island country that is fear driven. It also explains perhaps, their aversion to foreign products, or foreign anything for that matter. But the clamp down on spending now seems to be recognized in Japan as contrary to their hopes for a recovery. Therefore I suspect they feel they must defend the Yen. I read on another thread, some speculation that the Yen is under attack by Soros. If true he may have very well bitten off more then he can chew. I have also seen that the announced tax cuts are part of a deal with U.S. officials to support the defense of the Yen. In any case, we have a stake in a normalized (whatever the hell that is) Yen rate because of the trade deficit. One that is likely to grow no matter what considering we continue to make money on full employment and a continued stock market bubble of our own and a decreasing price on all those cheap Asian goods. Where does it all lead? That is a good question that defies any answers. Look, however, for a U.S. market correction next week if the Yen strengthens a lot more as well as some strengthening in other Asian currencies. I expect the defense of the Yen to continue in their Monday market, to which the U.S. markets will wake up to on its Monday morning. Then it may get interesting (as if it weren't already.) Best, Stitch

To: Michael Sphar who wrote (3041)	4/11/1998 10:52:00 AM
From: angra manyu	Read Replies (1) \| Respond to of 9980

All, A little offline ( but I guess china belongs here), Is there a group devoted to discussions of mainland China stocks. Thanks Krishna

To: Michael Sphar who wrote (3041)	4/12/1998 3:20:00 PM
From: HB	Read Replies (1) \| Respond to of 9980

Re Japanese Yen defense: I think part of might be an attempt to act decisively to stem the capital flows (out of Japan, into US bonds and equities, among other things) that we may have seen a bit of since April 1 "big bang". Probably the US authorities don't object, either, since further yen erosion could be a serious contractionary shock to our economy (with some latency period before the effects set in), and big flows of Japanese money into US assets could really exacerbate the US financial bubble in the meanwhile. Stock bubble + recession = fun, fun, fun, right? Can they do it? We'll see. I'd love to see a post from someone very well informed (OK, someone who knows more than I do, which ain't much) about the details of Japanese liberalization. How much money, in practice, could be rushing into our markets? This is really causing me to reevaluate my views... I have been adding a bit to my bearish hedge position (BEARX) though still somewhat net long, but nowhere near the big shifts I would probably be making in the absence of this Japanese money flow factor.... HB