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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Math Junkie who wrote (5862)	6/15/1998 5:21:00 PM
From: nigel bates	Read Replies (1) \| Respond to of 10921

An alternative would be to charter a fleet of light aircraft & drop large bundles of yen over Tokyo. - Just about the only way of preventing a deflationary spiral over there I can see. If this were done at the same time as the Japanese govt. organising an orderly failure of the worst of the domestic banks, while announcing a package to support the rest, then we might get a soft landing. Don't bet on it though. If you're looking for a buy signal, then how about waiting for Goldman Sachs to pull its flotation ? Don't bet against it. Nig

To: Math Junkie who wrote (5862)	6/15/1998 9:15:00 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 10921

Richard, from South China Morning Post.... try this scenario. I don't know where the source came from but the article suggested that $700 billion flowed into the US markets since the Asian flu started. Really hate to think what will happen to the market when those funds decide to exit for whatever reason. Ramsey US and Japan pressed on intervention FOO CHOY PENG in Shanghai, SHEEL KOHLI in London and agencies World leaders and the mainland's financial press yesterday stepped up pressure on Tokyo and Washington to intervene to halt the yen's slide. European members of the Group of Seven industrialised nations called for a decision on how to respond to the turmoil while National People's Congress chairman Li Peng urged Japan to stabilise its economy, saying the yen's decline had put fresh pressure on Asia. Xinhua news agency quoted Mr Li as telling former chief cabinet secretary Susumu Nikaido the "recent continued devaluation of the Japanese yen has imposed a new pressure on the economies in Asia". Addressing the opening session of the European Union heads of government conference in Cardiff, British Prime Minister Tony Blair was quoted as telling EU leaders: "Our economies will not emerge from this turmoil without being affected by it and we have to decide how to react." French Prime Minister Lionel Jospin said Europe needed to urgently assess the risks from the continuing economic crisis and consider how to react. The comments helped keep alive the likelihood the G7 may attempt a joint yen defence. Meanwhile, The Financial News accused Japan and the US of exporting their domestic economic woes by refusing to support the yen which, it said, could trigger global economic instability. "Why do Japan and the US allow the yen to plummet?" its commentary asked. "Tokyo economic analysts say mainly because a falling yen suits the economic interests of the two countries and helps them to pass on their economic woes." It said the US could cut interest rates and intervene in the foreign exchange markets to complement Japan's efforts to arrest the yen's slide. The editorial came a week after People's Bank of China governor Dai Xianglong admitted publicly the falling yen would hurt the country's foreign trade, capital inflows and economic restructuring. He vowed to uphold the value of the yuan, but this failed to assuage fears the currency would be devalued amid mounting pressure from the Japanese yen. Japan was the mainland's third biggest export market last year, accounting for almost 17.5 per cent of exports. The plunging yen makes mainland exports to Japan more expensive, lowering demand for its goods and adding to pressure to devalue the Chinese currency. "But if the US dollar falls sharply, it will trigger a massive exodus of foreign capital, leading to a crash in the American stock and bond markets, and seriously affecting its economy," the commentary said. It estimated about US$700 billion of foreign capital had flowed into the US since the outbreak of the Asian financial crisis last summer. "So, to protect its economic interests, the US has adopted a policy of high interest rates to support the dollar." The commentary suggested Japan, given its foreign reserves of $224 billion and overseas net asset of $920 billion, was capable of defending its currency. But it chose not to do so as a cheaper yen would do more good than bad to its economy. The commentary said a lower yen was good for Japan exports and would lift pressure on the economy caused by weak domestic demand. Based on a report by Jetro - a semi-government export promotion company - Tokyo would achieve its biggest-ever trade surplus if the exchange rate was 140 yen to the dollar. The general view in Japan was a weak yen was beneficial to Japan and the US at the expense of Asian countries savaged by the crisis and was threatening Beijing's vow not to devalue the currency. "If Japan and the US do not take effective measures together to stem the yen's slide, there could be economic instability on a global scale," the commentary said.

To: Math Junkie who wrote (5862)	6/15/1998 9:42:00 PM
From: Jess Beltz	Respond to of 10921

Richard, if the banking sector were not near collapse, I would go along with the crowd here and say that the Market will efficiently administer the medicine the Japanese need. I think however, that that is a very dangerous course to take now, precisely because of the problems in the banking sector. With regard to the scenario suggested in the messages, I don't think the Japanese are going to sell US investments in the face of what's happening in Japan right now. With the yen collapsing, if anything, they will buy more US investments, particularly US treasuries. The falling yen is the visible sign of the capital flight occurring in Japan right now, and I don't think the Japanese are taking their yen out of their own market simply because there is no investment vehicle left in Japan offering a decent return on investment. I think the flight is driven even more by the recognition (or perception) by the people of Japan that the government in Tokyo is paralyzed and unable to adopt the reforms needed. jess.