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To: Lee who wrote (55171)	10/10/1998 12:54:00 PM
From: Gersh Avery	Read Replies (1) \| Respond to of 58727

Hi Lee .. this bond/fund stuff is strange. On Monday the bond was supposed to be going up because fund shorts were being covered. Now it is supposed to be going down because of long covering by the funds .. Are you buying into any of these lines? Gersh

To: Lee who wrote (55171)	10/10/1998 3:33:00 PM
From: Elroy Jetson	Respond to of 58727

Anyone who borrowed Yen to purchase 30 yr US Treasury Bonds has seen this investment lose more than 25% of its value over the past week. A friend of mine is a lending officer for a large Japanese bank. Over the past several years his bank has lent billions of $ worth of Yen to companies and financial firms all over the world. When the $ and European currencies were appreciating against the Yen, these were ideal loans. Every year you would owe approx 7% less making the loan essentially interest free. The loan was great deal for the Japanese bank as well. They could borrow money at 1% and lend it out for 6% to 8%. Now the Yen appears to have bottomed out, triggered by the latest hint that the Japanese may be moving to recapitalize their banks and get their economy moving. Everyone around the world with a Yen loan has a powerful incentive to repay them or at least hedge the currency risk (which adds to the cost of the loan). This means they are strongly motivated to sell whatever they bought with the loan. This includes Treasuries and Stocks in the US and Europe and who knows what else. During the ongoing malaise in the Japanese economy, many people have forgotten how wealthy Japan is. In a serious recession, but still very wealthy.