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

To: Zeev Hed who wrote (6058)	6/28/1998 2:22:00 PM
From: Katherine Derbyshire	Read Replies (1) \| Respond to of 10921

Interesting article in today's Boston Globe on Japan. boston.com Nothing that will be really news to readers of this thread, but a worrisome comparison to the US in 1930 or so. Katherine

To: Zeev Hed who wrote (6058)	6/29/1998 8:23:00 AM
From: Mason Barge	Respond to of 10921

I overstated the degree of purposefulness in possible Japanese sales of US Treasuries, I admit (even though there is SOME sense of national economic competition among the Japanese). However, everything I read points in the same direction, i.e., there is a financial bubble in the US stock/debt markets due to Japanese purchase of US fixed-debt security, that is going to burst. Look at the Boston Globe article posted by Katherine: <<The chief vulnerability of America's ''Goldilocks'' economy is that it is financed with other people's money. In the first quarter of this year, for example, the United States sucked in money from the rest of the world at an annual rate in excess of a quarter of a trillion dollars. A very large share of that money comes from Japan, a country with a dangerously weakened financial system, an economy in a deflationary free fall, * * * With the entire system now teetering toward a deepening deflationary spiral, money has been exiting Japan and, in the process, driving the yen lower, and lower. Paradoxically, much of this fleeing capital has gone straight into America's sizzling stock and bond markets, and has been central to the fall of US interest rates, which are the key to the strong North American economy. * * * * America overconsumes, and that is why it is so critically dependent on foreign borrowing, and why sooner or later the year-after-year expansion of this country's foreign debt can only create real difficulties. >> Almost every article I read talks about this, but always as a secondary topic of conversation. So -- what happens to the US markets when the extraordinary flow of funds reverses (whether intentionally or by operation of market forces)? I wish someone would analyze this. I'm holding tons of bank stock, heavily appreciated, and I have a feeling it may be a good time to take some profits out.