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

To: MikeM54321 who wrote (4463)	6/12/1998 11:26:00 AM
From: see clearly now	Read Replies (1) \| Respond to of 9980

So what could be the result of this pattern/situation in our world history ...Has China emerged as the Asian Economic Leader (1998-sooner than most might have believed) and should we be looking to invest "carefully" in China...are their political indications that The US is compliant in this process?...is it all falling together in a new way? Just a thought from observing all the superb information and views on this thread...

To: MikeM54321 who wrote (4463)	6/12/1998 11:28:00 AM
From: Sam	Respond to of 9980

Mike, Kellner's article was interesting, but we've talked a little about the following on this thread in the past: "Japan must reflate its economy in a hurry. Government spending must be increased and there must be a tax cut that is viewed as permanent so people will be encouraged to spend these extra funds, not save them. The resulting budget deficit should be financed with fresh money created by the central bank in order that interest rates can remain low. As domestic demand revives, prices should stop falling and begin to rise. This will further stimulate the economy, since it will encourage people to buy sooner, to avoid paying more later." Who is it that is going to be doing the buying? I don't know what the average age in Japan is today, but it is pretty high. These older folks may spend more on health care, but they won't be going out to buy new sports cars. They probably have all the camera's they want, though maybe they want to go digital now? They aren't setting up new households. Will they go out and speculate in real estate again? Art? Golf courses? My guess is that they will still be reluctant to spend. Kellner's prescription is the same old same old. I have no idea what they do here. I don't think there is a solution. This is the logical conclusion of their market share at any cost, keep full employment, export-driven economic model. Anyone have any thoughts on the effects on the US if Japan's financial system friezes? One immediate thought: a lot of selling in the US bond market. Are there any figures on how much Japan Inc has in US bonds? Or in Euros? How do we find out what their foreign holdings are (or can we)? Reminder, what finally brought us out of the 30s depression? I'll leave it unsaid. Too unseemly.

To: MikeM54321 who wrote (4463)	6/12/1998 12:34:00 PM
From: Joseph Beltran	Respond to of 9980

in the meantime, japanese bureaucrats keep peddling their usual b.s: a few minutes ago CNBC stated that japan maintained their estimate of 1.9% gdp growth for this year (yeah, right: this is right after the confirmation that japan is officially in a recession!!!!) and I read another blurb a minutes ago which quoted a japanese politician as saying that G7 nations and japan were going to make a concerted effort to boost the yen (yeah, right: this after Rubin just about ruled that out entirely yesterday!!!!) who in the hell do these people think they are fooling, anyway? still in denial phase

To: MikeM54321 who wrote (4463)	6/13/1998 10:09:00 AM
From: MikeM54321	Read Replies (1) \| Respond to of 9980

Another interesting piece from an economist. I don't really have an opinion on what Erdman believes may trigger a relapse of the crisis. I did think it was interesting we are very close to it. Just think it wasn't too long ago that 150Y=$1US was really considered way out of line. Now we are at around 144.6, extremely close to Erdman's potential trigger for further problems. I do think it took a lot of guts(or something?) for those buyers who came into the US equities markets near the close yesterday. I was surprised how strong the buying was near the close. Particularly considering the news about Japan being officially in a, "recession" was announced AFTER the securities markets closed in Japan. It will be very interesting to watch the Nikkei on Monday and see how that may effect our markets. I posted a couple of articles referring to the recession at the bottom of this page. One even mentions Korea's market tanking 8.1% because of the news. Obviously ours was little effected. That's why I'm very curious how Japan is going to handle it when their markets open on Monday. Remember our general concerns here, when the Nikkei goes significantly below the Nikkei 15,000 breach and even more concern of Nikkei 14,000 breach. Both causing significant banking problems. It would be interesting, for anyone that has the figures for Japan's public pension funds flow into the market on Monday, to post them. Seems like that may be the only thing that keeps it up. The recession numbers posted below are a little confusing, but I'm guessing they say the same thing. MikeM(From Florida) ******************************************* ERDMAN CALLED IT** Japan's Yen Crisis By Paul E. Erdman SAN FRANCISCO June 12 -- In my CBS.MarketWatch.com column of April 29th, I asked the questions: What if there were a relapse in Asia? Would our markets continue to just shrug it off? And what is the potential for such a relapse? My answer to the last question was: "It could take only the Japanese yen slumping to 145 to the dollar, the devaluation of the Chinese renminbi, or intense social unrest in Indonesia--all real possibilities - to lead to another meltdown and send a tentatively mending Asia back to the operating table." We may now see all three happening, one after the other. Devaluation risk. At the time I wrote this, the Yen was at 129 to the dollar. By yesterday it had plunged to 144. This prompted the head of China's central bank, Dai Xiang, to warn that the yen's weakness was "having a very negative influence on Chinese imports and exports and the utilization of foreign capital." Should China counter with the devaluation of its currency, which would be accompanied by an abandonment of the peg between the Hong Kong dollar and the US dollar, a new round of competitive devaluations in Asia would ensue. The Indonesian rupiah would probably be the hardest hit. As the prices of imported food soared once again, intense social unrest, and perhaps civil war could result. Common sense tell us that this time around the markets would not just shrug it off. Maybe yesterday's 160 point drop in the Dow is just a precursor of worse to come. ****************************************** THE RETURN OF THE R-WORD** Japan's slide raises cautionary flags NEW YORK June 12 -- Japan's economy contracted by 0.7 percent over the past 12 months, according to Japan's Economic Planning Agency. The key report was released after the Tokyo stock market closed, but stocks tumbled 8.1 percent in South Korea on the news. ****************************************** JAPAN'S ECONOMY IN RECESSION AS GDP SHRANK 1.3 PERCENT** Japan's economy fell into recession for the first time in six years during the January-March period, and shows few signs of rebounding as capital spending and exports deteriorate. Japan's gross domestic product shrank 1.3 percent in the period from the previous quarter, or 5.3 percent at an annualized rate, the government said. That was the second straight decline, the common definition of a recession, something that hasn't happened since the April-September period of 1992.