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Technology Stocks : Novell (NOVL) dirt cheap, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: dwight vickers who wrote (22797)	6/19/1998 3:43:00 PM
From: DJBEINO	Read Replies (2) \| Respond to of 42771

Most successful lure: Novell raffling off one of the new VW bugs (in Novell red) for anyone who would complete each of their presentations on baffling network architecture. Thousands did. nypostonline.com

To: dwight vickers who wrote (22797)	6/19/1998 10:45:00 PM
From: Paul Fiondella	Respond to of 42771

(Off Topic) Japanese Banking Crisis & Summer rally Just so we get the timeliness picture, this being options expiration day, Japan has an existing mechanism for disposing of bad bank debt. The government setup an institution that can absorb bad debt. Thus the Long Term Financial Bank of Japan, which is about to go under wants to pursue a merger of itself with another bank, taking along its good loans and dumping the rest into that government institution. This approach differs from using the equivalent of a Resolution Trust Corporation which in Japan is to be called the Bridge Bank. The Bridge like the Resolution Trust and unlike the government institution set up to absorb bad debts would have the power to close and liquidate banks, selling off their assets in the open market. Hashimoto proposes legislation to set up this entity at a special meeting of parliament in late July. Until then we have the first major pump priming injection of fiscal stimulus by the Japanese government to start in early July and the Group of Seven emergency meeting called this weekend to meet in Toyko. This meeting is to coordinate the currency stabilization effort. The topic of Clinton's meetings in China will undoubtedly be the Chinese economic situation which is perilous. China is restructuring its economy. It needs contimued economic growth or its restructuring will result in massive unemployment (they currently have a roaming group of unemployed taking day jobs in cities of around 85 million people). This is a much bigger problem than the press (which only plays the missle angle) understands. What does this have to do with NOVL? Well will markets be satisfied with this weekends actions? Some of us have been expecting another quarter of weak but not disasterous earnings and a Summer rally led by MSFT, with its good earnings and its Win98 introduction, plus a rotation of money into small cap stocks like Novell which have been earmarked for momentum plays. If the currency speculators kill the Summer rally, they also kill Novell whose prospects in a Bear market look dubious to me. I assume that when capitalism feels threatened by speculators it will crush them. The major problem with the currency is determining the proper rate of exchange to defend. That is where the study of capital flows referred to here previously comes in. measured in these terms the dollar is overvalued against the YEN. If the bureacrats can find its right value in the exchange negotiations taking place in Tokyo then later when the Balance of Payments crisis and inevitable economic slowdown hit here it will be less of a shock to the stock market to see that currency depreciate. So much for free markets and the market knows best. Let's see how long it takes Rubin to get the story right to the press.