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

To: Henry Volquardsen who wrote (7143)	10/16/1998 9:25:00 AM
From: Joseph Beltran	Read Replies (4) \| Respond to of 9980

Zeev, Lowering interest rates has not (apparently) helped Japan with its credit crunch. Why should we expect the lowering of rates here to help us. While the japanese banks are loaded down by a load of bad loans, american banks may be loaded down with big prospective writeoffs a la LCTM... any thoughts? regards

To: Henry Volquardsen who wrote (7143)	10/16/1998 10:32:00 AM
From: Zeev Hed	Read Replies (4) \| Respond to of 9980

Henry, I hope the Fed's are not miscalculating. They may flood the market with liquidity because of the rising "dfear of lending', but if that money finds its way in equities rather then in lending, they will have to fight the liquidity trap from lower interest rate plateau, where, as Japan has shown, it becomes less and less effective. I think they should let a major bank that took unnecessary risks go down in flames. That would set the stage for a much healthier environment. Patching never works too well. Right now, however, you got to go with the flow and assume that the Fed's action will have its desired effect, namely, repump the failing aggregate demand Greenspan is fearing. Zeev