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To: dougjn who wrote (14722)	9/8/1998 5:31:00 PM
From: Bernard Levy	Respond to of 152472

Doug: In support of your latest post, I would like to indicate that the Japanese market has proved surprisingly resilient during the last few months. In spite of all doomsday predictions that the Nikkei was on its way to 11,000 and then 8,000, it seems to refuse to go below 14,000, and whenever the mere glimmer of good news appears on the horizon (such as the possibility of a Fed cut in interest rates), it rallies strongly. May be I am naive, but these are the marks of a bottom, and if the Japanese political parties can agree on how to clean up the banks, I would not be surprised to see a very strong Japanese rally within the next 6 months. Also, at some point, all the extra government spending and tax cuts will have some effect. Best regards, Bernard Levy

To: dougjn who wrote (14722)	9/8/1998 8:11:00 PM
From: Ramsey Su	Respond to of 152472

Doug, quite to the contrary, the markets now are complete poker games driven by unconventional forces. After the initial onslaugt this morning, the "small investors" actually drove down the market before the programs kicked in again later in the day. The "players" can probably tell us who was doing what to whom. I was just happy to be along for the ride and picked up a few OEX puts along the way. Besides the article below, there were a few more which I can't locate at the moment, talking about the use of Japanese pension money to support the Nikkei. Earnings are weak everywhere and my chicken little sentiments have not changed. If you have any good analysis that will alleviate my worries about Japan, I would appreciate a link. Don't be fooled by this huge pool of savings, something like US$10 trillion, that the Japanese people supposedly have. I have never seen a break down on exactly where this money is. Further more, the government might have been living off the spread of these funds already. This was indeed the Japanese version of the Y2K problem, when billions of these postal savings mature. If the Japanese people finally got smart and decide to invest their money in other instruments, which the big bang reforms have helped made available, the legal rip off by the postal savings system may be over. As for earnings, take a look at this trend and see if you think it still justifies the current S&P PE of around high 20s. tradetools.com Ramsey TOKYO (Dow Jones)-Tokyo stocks closed moderately higher Tuesday after a 5.3% rally in the Nikkei average Monday amid continued volatile futures-led trading by hedge funds and other institutional investors. Despite a brief 500-point rise in the Nikkei stock average midmorning, the market later trimmed the gains as investors and dealers cashed in near-term profits. Participants said that while the yen's recent gains and comments on interest rate policy from U.S. Federal Reserve Chairman Alan Greenspan have supported prices, much of the recent rally has been due to technical trading of futures and doesn't reflect an improvement in Japan's weak economic fundamentals. Hedge funds were seen short-covering to cover losses posted in the recent downturn of emerging markets. A large amount of arbitrage short positions are also being actively covered before Friday's "special quotation" cash settlement of September futures and options contracts, traders said. "The market's direction remains uncertain before the SQ," said Kunihiro Hatae, general manager at Tokyo Securities Co. "Economic fundamentals aren't strong enough to support share prices, and trading over the past two sessions has been dominated by technical futures-led activities." The Nikkei average of 225 selected issues rose 123.43 points, or 0.8%, to 14,913.49 Tuesday. The Nikkei rose 747.15-points Monday, the second largest point gain this year. The market gauge finished the 1997 trading year at 15,258.74 and ended the latest fiscal year at 16,527.17 on March 31. Traders say the near-term upside for the Nikkei average is 15,300. This session, the key stock index rose as high as 15,294.26. Players will closely monitor how U.S. stocks trade on Tuesday after Greenspan said in a Friday speech that the Fed is no longer averse to cutting interest rates because it fears the U.S. economy is increasingly vulnerable to the global financial crisis. The U.S. stock market was closed Monday for the Labor Day holiday. The Tokyo Stock Price Index, or TOPIX, of all First Section-listed issues retreated 1.64 points to 1,131.01. Volume on the First Section of the Tokyo Stock Exchange was estimated at 490 million shares, compared to 503.53 million shares Monday.