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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Grommit who wrote (30466)	10/7/1998 5:35:00 PM
From: Richard D	Read Replies (1) \| Respond to of 95453

Shouldn't the lower dollar help oil prices, apart from recession predictions? Oil cracked 15 dollars after hours. We may still see a bounce off $15/barrel by tomorrow. One possible scenario explaining today is that Japan is suggesting a government bailout for it's banking catastrophe. In order to pay for it, they are repatriating' capital by selling their US treasury bonds. This explains the big swing in rates today and the lower dollar (dollars sold as the return from treasury sales are converted to yen.) The swing today was apparently huge which would point to either Japanese government involvement or large institutions. The good side would be that we may see light at the end of the tunnel in Asia if Japan got its act together. The more ominous possibility is that Japanese banks are selling US treasuries because they formed the collateral for continuing operations. When the Nikkei broke 13-14,000 many Japanese banks were technically bankrupt and received what amounted to a margin call requiring liquidation of their US holdings. This seems unlikely since Japan rallied so enthusiastically last night. A strong Japan would be the most bullish event for everyone concerned. Let's hope they are turning a corner. Richard