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To: Ramsey Su who wrote (10270)	4/27/1998 2:39:00 PM
From: dougjn	Read Replies (1) \| Respond to of 152472

If Asia weakens further that should keep the Fed from raising rates as you say, which is actually a positive. I think you are right that Greenspan is quite worried about Asia. He is quite focused on the dangers of a 29 type crash. Personally, I think it is unlikely that either Japan or China will crash. Basically because neither has a huge amount of external debt. And both are quite tightly managed. The big danger with Japan is that it continues to just muddle along. A recession. And then continued slow growth. With little loan capital available inside Japan. I'm not sure that all of that is so bad for the US these days, with our economy in danger of overheating. Korea was a lot less stable, but its financial crisis appears to be contained. Basically because they are taking enough reform steps for the banks etc. to be willing to roll over loans to them, at higher rates. The pain in the streets is just beginning however, I agree. But I'm interested in hearing your realistic worst case. How might it unfold? Doug

To: Ramsey Su who wrote (10270)	4/27/1998 3:04:00 PM
From: w2j2	Respond to of 152472

<off topic> Ramsey & Doug, IMHO you guys are correct. No way will Greenspan raise interest rates. The WSJ article today is Greenspan purposefully leaking the "bias toward tightening". Greenspan can relieve a lot of inflationary pressure by taking some hot air out of equity markets, which is what is happening today. Other than equity markets, where is any inflation? Certainly not on mainstreet. Politically, raising rates would cause an uproar in an election year when there is scant evidence of inflation. Worse, raising rates would strengthen the dollar and possibly destabilize Japan, causing a world wide depression. Greenspan is way too smart for that. wj