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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: BDR who wrote (8440)	5/6/1998 2:22:00 AM
From: Mike Farrar	Respond to of 18691

Hong Kong is the one to watch. Teetering just above 10,000. Breaking this barrier will not be a good sign. Maybe tonite. Indonesia is the place right now that is a mess. Rioting and looting are probably just around the corner.

To: BDR who wrote (8440)	5/6/1998 3:34:00 AM
From: Michael	Respond to of 18691

<<if I am not mistaken and the Japanese economy still stumbles along. Is there something different this time?>> The new bear argument is that with South Korea about to collapse. quote.yahoo.com^KS11&d=t Japanese Banks are facing huge loses on top of their already badly strained liquidity. The economic world has never seen what could happen if Japanese Stock Market just dropped to equal equity value to America's already all time record valuation on it's equity. quote.yahoo.com^N225&d=t The Nikki would easily drop under 10,000 and trigger an $100 Billion + IMF Rescue .

To: BDR who wrote (8440)	5/6/1998 9:24:00 AM
From: Oeconomicus	Respond to of 18691

Dale, the banks didn't have to worry about it unless it was that low at their year end, March 31. The Japanese government, as was widely reported back in March, was actively buying stocks to prop up the market (one official even acknowledged at target of 18,000 on the Nikkei by 3/31). I think the Japanese also changed their accounting rules, effectively giving the banks "higher of cost or market" accounting treatment for the stocks they hold (Joey, can you confirm whether this was actually implemented?). If this is true and the Japanese markets continue to fall, one may never be able to tell from published financials, but several large banks could actually be insolvent. If I remember correctly, 15,000 was about the level where analysts thought losses on equities could impair the banks' capital adequacy (which should impair their ability to make new loans - bad for the economy - and increase the cost of their own capital). How much further to actually be insolvent is another question. Bob