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To: smolejv@gmx.net who wrote (3626)	8/26/1998 12:45:00 PM
From: Paul Corbett	Read Replies (1) \| Respond to of 11051

I tend to think US interest rates are headed DOWN and not up...due to weight of money coming in from Japan, and stalling sharemarket...Also Russian uncertainty will move money out of mark at least short term. The position of USA as safe haven will cease when Euro starts trading in 1999 as then there will be another safe haven. I think the Russian problem is not as severe as the media says for the market. The Russian economy is tiny. The real problem is still Japan which is still the world's 2nd biggest economy.

To: smolejv@gmx.net who wrote (3626)	8/26/1998 8:16:00 PM
From: Gersh Avery	Respond to of 11051

DJ Re: "when does the world expect the turn-around to happen?" The initial report I read had this week as the time frame when the Japanese would have to do something for their banking system. The nature of the banking problem is supposed to be the worst that they have faced yet. The Japanese are caught between two hard places. First is a great desire to not leave their children with debt. The second is to avoid the shame of banks going under. Another hard place is, of course, the value of the Yen. Just printing money would further weaken the yen and threaten to cause debt for their children. The weaker yen of today, I believe, will work out in favor of their banks. The non performing loans that are the problem, are denoted in yen. With the drop in the value of the yen and the rise in the price of US bonds the Japanese have been, in effect, short the yen for a long while now. If I were in their shoes, I may deeply consider covering the short let the market rebound then short again. This would provide the liquidity needed to bail out the banks and leave them in the same US bond position as they started out. Except they would then have the cash to support their banks. The Japanese also have a desire to not cause the collapse of the US market. This, I believe, is the only reason that they have been slow this week to do the banking bail out. BTW have you noticed the pattern that has evolved lately? Seems like all one would have to do is go short the market at 2:00 PM and cover at 3:30 PM every day. I think this pattern is an Asian footprint. Gersh