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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: robnhood who wrote (19665)	6/2/1998 10:57:00 PM
From: robert b furman	Respond to of 94695

General market theme :supply > demand For the recent past anyhow ! Good observation. Bob

To: robnhood who wrote (19665)	6/3/1998 4:30:00 AM
From: paulmcg0	Respond to of 94695

<<she's running out of steam>> The next big disaster is going to be Japan, which has never got serious about cleaning up the mess when the bubble economy in stocks and real estate collapsed a few years ago. Watch for Japanese financial institutions selling U.S. stocks on which they've a profit, in order to cover losses at home. Here's an interesting article from the June 3, 1998 edition of the Japanese newspaper Asahi Shimbun. -------------------------------------------------- Japan faces 1 trillion yen revenue shortfall Asahi Shimbun The government will likely see a budget shortfall of as much as 1 trillion yen for the fiscal year that ended in March because of falling tax revenues, government sources said Tuesday. The shortfall is expected as the nation's protracted economic slowdown takes a larger toll on corporate and individual income taxes than the government initially thought, the sources said. The general-account revenue shortfall for fiscal 1997 is the first in four years, and will likely oblige the government to issue more deficit-financing bonds, they said. But experts warned that more bond issues would further strain the nation's finances. The sources said the fall in revenues is attributed to the flagging economy, which has eaten into corporate earnings. The Finance Ministry said Tuesday that revenues from corporate income taxes declined as much as 12 percent in April from a year ago. Companies that closed their books in February paid less tax due to poor corporate performances, the sources said. Many were retailers suffering from a severe slowdown in household consumption. The government initially expected corporate income taxes to amount to about 14 trillion yen for fiscal 1997, about a quarter of the projected total tax revenue for the year. While fiscal 1997 revenues from corporate income taxes will not be finalized until companies that closed their books in March make their tax payments, the sources said the current trend suggests the government will face a revenue shortfall of about 800 billion yen. In addition, individual income taxes and other taxes are expected to post a combined shortfall of between 500 billion yen and 600 billion yen due to sluggish real-estate transactions. A slight increase in consumption tax revenues is expected. But the total tax revenues are expected to come to about 55 trillion yen, about 1 trillion yen short of the government's latest projection of 56.2 trillion yen, the sources said. The government plans to temporarily make up for the shortfall by borrowing from a "buffer" fund. But once the amount of the shortfall is finalized, the government must pay back what it borrows from the fund when it prepares its fiscal 1999 budget. The government will then have to either scale back fiscal 1999 expenditures or issue more deficit-covering bonds, the sources said. The Fiscal Structure Reform Law--which was enacted in November to balance the budget--has been revised to relax regulations on deficit-financing bonds and to pave the way for tax cuts designed to improve the economy. The experts said that if the government continues to suffer from budget shortfalls and issues more deficit-covering bonds to cope with them, the law will be worthless.