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To: Christopher JR Laughren who wrote (10700)	4/26/1998 2:24:00 PM
From: Giraffe	Read Replies (1) \| Respond to of 116788

The Financial Times has an interesting analysis of the effect of the Japanese situation on US equities. Here's the conclusion: >>If this market is fairly valued, the moon is made of green cheese. The risk is clear enough. It is even spelt out by the IMF: equity markets in many countries have recently risen to new highs and the US dollar has strengthened further, it says. With the current account deficit of the US expected to widen substantially this year, the risk of a reversal in attitude towards the dollar at some future stage is obvious. "If world commodity prices were to recover at the same time and labour market pressures continued to push up wage growth, the Federal Reserve could face the need for a significant tightening of monetary conditions and both bond and stock markets might be subject to significant corrections. The strength of sterling points to similar concerns in the case of the UK." Amen to that. It may cheer people in the west to believe the Asian crisis has little importance for them. They may believe its disinflationary impact will even prove a boon. In the US many may conclude it all proves that their economic model is the only one worthy of imitation. But never mistake a bubble for enduring economic triumph. The great bull market cannot last forever; what cannot last will not do so; and the higher the climb, the bigger the fall.<< ft.com (requires free registration to access)