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

To: Stitch who wrote (7212)	10/20/1998 12:16:00 AM
From: Dayuhan	Read Replies (2) \| Respond to of 9980

Stitch, From today's IHT: Rubin Lectures the World Nations Must Look to the Long Term, He Says NEW HAVEN, Connecticut - Governments around the world must make tough economic decisions, often at odds with their short-term political interests, to protect the increasingly interdependent global economy, Treasury Secretary Robert Rubin said Saturday. ''The world is now experiencing the most serious financial crisis, in many respects, of the last 50 years,'' Mr. Rubin said in a speech Saturday at Yale Law School, where he received his law degree in 1964. ''One of the great political challenges in the decades ahead is for democracies to be able to make the unpopular economic decisions requisite for success in a transnational, interdependent global economy.'' At the heart of the challenge is bridging the gap between the sovereignty of national governments and the demands of the global economy, Mr. Rubin said, blaming the current crisis on ''excesses in investment and credit extension from developed nations into developing nations without adequate weighting of risk.'' That requires building political support for unpopular reforms, Mr. Rubin said, citing the efforts of President Kim Dae Jung of South Korea to bring together businesses and labor and stabilize his country's currency crisis. ''A similar process occurred in Thailand, though in both cases great challenges remain ahead,'' Mr. Rubin said. That has not been the case in Russia and Indonesia, however, Mr. Rubin said. In those countries, ''the political systems never took ownership of reform, the economic policy decisions in the proposed reform programs consequently became irrelevant, and the economies are in dire straits.'' In a global market, problems can arise when some countries' legal systems are inadequate or undisciplined, and capital flows into the country without regard to risk, Mr. Rubin said. Am I reading this wrong, or does he seem to be saying that the responsibility for weighing and assigning risk lies with the legal system of the borrower's country? Are the sources of the capital not in some way responsible? I also note that there is no discussion of why these politically unpopular decisions are politically unpopular. Possibly because they impose real hardships on ordinary people? Always a hard thing for a democracy to get away with. I wonder if we'll start hearing the old refrain about the need for authoritarian governments again... Steve

To: Stitch who wrote (7212)	10/20/1998 12:52:00 AM
From: Tundra	Respond to of 9980

Stich, Another article I just saw also reminds me tangentially of Stratfor. It is an article that at this point I am too tired to properly analyze. It involves opinions of the Keidaren; a group mentioned in the Stratfor post as being quite influential. I guess my initial reaction is to try to determine whether what they say is consistent with what they really mean; e.g. whether another motivation and/or goal is below the surface. My fondest hope is that I will revisit this thread tomorrow; and will find the answers to these issues from its talented contributors thus eliminating the need to use my limited resources to think it through..<g>. Regards, Tundra Japan Keidanren Proposes Entity To Hold Cross-Shareholdings TOKYO (Nikkei)-The influential business group Keidanren unveiled a proposal on Monday for the creation of an entity designed to help companies unwind their cross-shareholdings in each other without swamping the already shaky stock market with sell orders. Keidanren, or the Japan Federation of Economic Organizations, will lobby the Liberal Democratic Party, the Ministry of Finance and the Ministry of Justice to win support for a raft of tax and legal changes that would be required to adopt the scheme. The business group hopes to get related legislation sponsored directly by lawmakers for early passage. Under Keidanren's blueprint, an entity would be set up to serve as a temporary depository for cross-shareholdings. Two companies that agree to unwind their shareholdings in each other would transfer the shares to the entity in a noncash transaction that would bypass the stock market. The entity would hold shares in custody for up to five years. The companies would have the right to withdraw from the entity their own shares during the five-year time span, again in a noncash transaction, and retire the shares. The scheme would in effect allow companies to sever their cross-shareholding ties without selling shares on the market and later retire their own shares without paying out cash to repurchase stock. Keidanren sees the scheme as benefiting banks that have been swept up in the tide of moves to unwind cross-shareholdings. Banks would not be required to take any hit to shareholders' equity during the time their shares are in custody at the entity. (The Nihon Keizai Shimbun Tuesday morning edition)

To: Stitch who wrote (7212)	10/20/1998 8:57:00 AM
From: Cynic 2005	Read Replies (1) \| Respond to of 9980

Stitch, my apologies for not getting back to you earlier than this. Re. Greenspan, here is a link to his views (expressed in the 60's) on the monetary policies of the late 20's which, he too thinks, caused Great Depression. fame.org I don't know if I follow Fleckenstein. My view is not too different from Fleckenstein. He often quotes Greeny from his past. If anything, they confirm my assertion that Greenspan checks the wind before he makes a statement. I do not claim to be smarter than he is. But, often times the best ideas can be the simplest. I do not think he can control all the hot money around the world. But, could have certainly controlled the leverage in financial markets. Remember his July 97 address to the congress in which he said "margin debt" is not a problem. Well, what is the problem at LTCM then? It didn't happen 'after' his remarks, did it? God knows how many more such skeletons are in the closets.