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

To: Michael Sphar who wrote (6454)	7/31/1998 7:49:00 PM
From: Jim Willie CB	Respond to of 10921

Mike, I think the reality lies somewhere between our views... sure, huge overhang of Japanese capital is looking for better returns than the 1.7% in JGB bonds... rules relaxed last April as part of new J year, which was first phase in considerable J money heading to our markets... partly explained the dollaryen rise this spring before Rubin was ordered to intervene... coincided with futile attempts by LDP to stimulate... more J money will come to US for sure, big money my point is that European economic development has been strangled by socialism for decades... now with the EU all manner of guidelines have been imposed on federal debt, interest rates, unemployment, etc... consequently, the leading Euro economies have only begun to grow and become more efficient.. they are shedding many ways like protection of useless inefficient companies, restrictive business practices, restrictive labor regulations, dismantling of portions of social safety nets, etc Europe is where US was in 1995, in the early stage of its economic expansion... Euro has far less skilled labor shortages like US, while their labor unions are losing power... Spain used to force a two-year salaried severance for furloughed employees (not no more)... plenty of room for Euro to grow yet... if econ expansion is a 5-stage process, US might be in stage#4 while Euro is in stage#2 Furthermore, European stock markets did not grow anywhere like the US did in 1995-1997... their pullbacks now are akin to US's in 1994... I believe German, UK, French bourses will outpace US for next few quarters... their equity growth rate in first half of 1998 reminds me of US in 1993-94 US firms are scratching and clawing as profit margins shrink from higher labor costs and weaker pricing power... and how much lower can our supply costs go? ... meanwhile Euro profit margins are widening as huge benefits costs are coming down finally, and as restructuring is in very early phase... plenty of additional cost cutting in Euro economies... tons of fat and inefficiencies are easy to identify... not nearly nearly nearly as much cost cutting to be done in US... Europe has JUST discovered layoffs as a financial engineering tool... estimated that 10% of entire European economy is engaged in currency translation business... now that is a huge pool of labor and fat and useless cost... gonna be churned eventually into productivity and profit my guts tell me that Europe will be fighting not only for the investment capital from US investors, but also from Asian... I admit Japanese love America first, but Germany has strong ties in Asia also some evidence that in last few weeks money is heading to Europe: as stocks have come down 500 Dow points and 170 NDQ points, bonds are about the same... one day this week Dow and NDQ were down badly, but bonds were weaker also... the dollar has given ground versus DMark and Swissie... that is telltale sign of money exiting... some went into safe money market funds to be sure, but some went to Europe / Jim Willie