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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Bosco who wrote (6991)	10/7/1998 10:41:00 AM
From: Paul Berliner	Read Replies (3) \| Respond to of 9980

Thread, Bosco, RE: PBS & Japanese banks: I saw the Newshour and was very surprised that the moderator didn't as D. Tseng anything about the HKMA stockmarket interventions. I bet that he was specifically told not to about it. Also, Summers had his usual nothing to say. He also looks pretty tired since I saw him on TV a few weeks back. Probably from jet lag - flying to SF, to connecticut and elsewhere, and also from screaming at the Japanese to fix the banks. Thread: How 'bout that Nikkei - all the specs covered their bank shorts last nite and sent it 6% higher. Personally, I think the plan is a wash.... it calls for injection of public funds into troubled banks, which should only prolong the misery. They should follow Korea's example and pull the plug on the respirator - a-la Dr. Kevorkian. This is yet another silly plan that doesn't address the key issue. As always, Japan never fails to dissapoint. And what a great opportunity to get short the yen again... not vs. the sliding greenback but maybe vs. the Mark or Pound (if England doesn't cut rates this week). I have 5 main clues as to what I look for when trying to decide if the U.S. is falling into a long bear market. I wrote them for a paper over 2 years ago and it seems they have finally come into play. 1. Markets down more than 20% of highs (has more or less happened) 2. The weakening of the Dollar vs. 2 or more major currencies (has now happened). 3. Earnings warnings from capital equipment/construction-type companies (has already happened - these co.s (Deere, Cat, FMC, Case are equivalent of the 'canary in the coal mine' for the economy' in my opinion). 4. Negative divergences all over the place, such as those in July when the market made a new high with poor breadth, or currently the negative divergence as to how the stock market is no longer following the bond market. As rates fell, stock always rose, this is no longer the case the last few months. And who says lower rates should warrant higher stock prices anyway - just look at Japan, where the rates seem to warrant Nikkei 38,000 again. Are we doomded to repeat Japan's experiences and a dreaded boom/bust cycle? 5. Sharply higher commodity prices - (has not happened). Gold may have risen 10% as of late, but Russia has threatened to sell gold and so has the IMF this week.... the gold bugs are still going to be hurting... as for oil, prices still look to go lower, especially if Iraq has the sanctions lifted which will only worsen the oversupply. #5 is the only reason that is keeping me from thinking that we're really in deep, deep long term trouble.