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To: DaveMG who wrote (14960)	9/13/1998 3:44:00 PM
From: gdichaz	Read Replies (2) \| Respond to of 152472

Cheers. It is with great relief that we are back to discussion of Asia and Japan in particular. Almost seems on topic. :-) The Q launch is going very well by all reports. Depression [sic.] or no. The yen has strengthened substantially against all foreign currencies - good for US exports to Japan. Also just read that opposition parties will permit the LP to proceed with bank bail out. Whew. A relief. Japan will not be back on the fast track soon but the situation has bottomed out IMO. Once again - this almost seems like this board is back to normal. Now we just need to hear from New Zealand. :-) Chaz

To: DaveMG who wrote (14960)	9/13/1998 5:33:00 PM
From: Jon Koplik	Read Replies (1) \| Respond to of 152472

Dave - regarding ... I thought one of the interesting things mentioned in one of Ramseys links which were posted last night was how long it was expected to take for these interest rate reductions to have an impact in the Japanese economy. In the US I'm sure a cut would cause a knee jerk rally ... If I told you of a country with an inflation rate of, say 18%, and short-term and long-term interest rates of around 20% or so, and then told you that the central bank in that country raised their "discount" rate (or whatever) from 20% to 21% and were surprised when not much changed with respect to borrowing habits, levels of new investment, speculation in financial markets, etc., then you'd probably say -- they need more than a 1% upwards change to "do something." Similarly (back to the "real" world), I find it very hard to believe that anyone thought a change from 0.50% to 0.25% (on short-term rates) in Japan would "do something." Jon.

To: DaveMG who wrote (14960)	9/13/1998 7:04:00 PM
From: kech	Read Replies (3) \| Respond to of 152472

Dave - Right - that is what the liquidity trap means. The drop from .5% to .25% doesn't do anything because it is the credit risk - i.e. getting the principal back, that drives any lending decision. I was just trying to say that I don't think that applies yet to the U.S. economy. Also, a U.S. cut also has an effect on foreign markets because it reduces the attractiveness of parking all those yen in the U.S., though it also drops the U.S. dollar and makes exports from Japan less competitive. Tom