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

To: EPS who wrote (23661)	8/29/1998 9:59:00 PM
From: Paul Fiondella	Read Replies (4) \| Respond to of 42771

Friday is too late. It's Monday I'm worried about and Sunday evening watching the Nikkei. The LDP opposition hold the balance of power in the upper house of parliament and the LDP cannot get a banking bill through parliament without opposition party support. The opposition is arguing for a lower house snap election. Meanwhile they never approved a Bridge Bank bill. So there is no mechanism to liquidate bankrupt banks. Noone even knows if the LTCB (the current bank which is trying to merge with Sumimoto Bank) is solvent. And Obuchi is trying to inject an enormous amount of public capital in to LTCB! If Clinton had balls he would threaten to call off the Washington meeting if Obuchi doesn't get a handle on the banking situation in Japan. The emphasis shouldn't be on getting Japan to stimulate its economy, it should be on getting Japan to deal with the asset inflation problem left over from 1990. Remember that these Japanese banks value their stock holdings into their capital base. If the Nikkei continues to collapse these banks are going to be in technical default---with insufficient assets to cover their outstanding loans and without the requisite capital to borrow money internationally. That means a premium will be charged to Japanese banks floating international loans. So you can kiss any recovery goodbye in those circumstances. In fact you could have five more banks pop up with the same problems as LTCB! As to the US tax cut pressure. well what would you expect from this administration? You don't wish a recession (or depression) away with a tax cut in a country that saves an enormous amount of its income. It takes awhile to get into recession/depressions and its not easy to get out of them. They still have not reduced the sales tax increase that began the current slide! Even New York City is smart enough to realize that a sales tax moratorium cause consumers to buy!