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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: John Hunt who wrote (16717)	10/8/1998 9:05:00 AM
From: Wren	Read Replies (1) \| Respond to of 18056

Today looks bad. Abby cuts her expected earnings targets for both 1998 and 1999. She now expects 1998 earnings to be 5% over 1997, and 1999 to be 7% over 1998. S&P futures are currently down 24.00 House votes on impeachment Europe down sharply - looks like an average of almost 4% Japan down almost 8%

To: John Hunt who wrote (16717)	10/9/1998 6:15:00 AM
From: John Hunt	Respond to of 18056

How Soaring Treasuries, Sinking Dollar Score One-Two Punch nypostonline.com << There's another reason besides Washington for the dollar suddenly getting whacked. As difficult as the Washington situation is to fix, this one is even harder. Interest rates in Japan have been under 1 percent for the last four years. Because of this, hedge funds - many of which are headquartered in this country - have been borrowing in Japan at the remarkably cheap rates. The hedge funds have been using those loans to make investments around the globe - many of which have gone bad. By its nature this action makes these hedge funds short the yen, in much the same way a person would short a stock as a bet on that stock's price going down. To understand this, remember that when the hedge funds have to repay these loans, they must do so at whatever the going rate is for yen. So when the yen rises in value - and it has risen 20 percent in recent weeks - the cost of the loans that have to be repaid in Japan become much more expensive. Currency moves like the ones the world has recently experienced could turn the slightest miscalculation on the part of hedge funds into a fatal error. >> It never rains, but it pours. :-))