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To: goldsnow who wrote (22454)	10/30/1998 10:34:00 PM
From: Sam	Respond to of 116762

It seems like the economies all depend on Japan buying EURO,and US bonds ,.I got the idea that Japan was bankrupt .i guess it all depends on who you listen too sam

To: goldsnow who wrote (22454)	10/30/1998 10:47:00 PM
From: Little Joe	Read Replies (1) \| Respond to of 116762

goldsnow: Thanks for the post it is interesting. As I watch this unfold it is amazing. It appears that at least temporarily strength has returned to the stock market and a likely test of the highs appears in the offing. In the meantime the XAU, a precursor to gold in the past, has refused to give much ground. The picture is very confusing, but it appears clear to me that the powers that be will support the economomy with as much liquidity as they can. The problem of course is the added liquidity will bring inflation. If it does not then things are worse still, because if liquidity does not bring inflation, it means things are to far gone, and we have a depression. I must say that I don't see a happy resolution as an option. This I do believe more and more and that is that this will not resolve itself nearly as quickly as I thought. I think the markets top may take as long as two or three years. At least that is what I think tonight. Who knows what I'll think tomorrow. Live long and prosper, Little joe

To: goldsnow who wrote (22454)	11/2/1998 12:18:00 PM
From: Alex	Read Replies (3) \| Respond to of 116762

Asia: One Step Forward, Two Steps Back By Paul Lam Senior Markets Writer The Federal Reserve's decision to cut interest rates gave way to newfound optimism that the U.S. economy will avoid a likely recession provoked by the spread of the ongoing global turmoil. Since the first round of rate-cut in early October, stock markets around the world have recouped significant portions of their earlier declines, notably with Hong Kong's Hang Seng index lurching pass the 10,000 barrier for the first time since May. Here in the United States, the assumption that lower interest rates axiomatically justify higher equity prices sent the Dow Jones Industrial Average back well over the 8,000 mark. The resurgence of enthusiasm was in part due to a seemingly stabilized Asia. No longer do we read about starvation, riots and massive capital flights leading to collapsing currencies and stock markets. In August, the fact that selected Asian bourses actually outperformed U.S. indices caught the eyes of many money managers and made its way to the pages of major financial newspapers. But whatever the investment realm would like you to believe, the region is far from being in a state of convalescence. In fact, Asia has been sinking deeper into economic misery. Japan Due to ongoing support by government funds, the Nikkei 225 has been allowed to float within the 13,000 level. Sentiment in Tokyo is far from optimistic, with many market watchers expecting further drop below 10,000 (the Nikkei reach a peak of 39,000 a few years ago before a prolonged slump). The elation associated with the passage of the financial stabilization plan will prove to be short-lived as the list of banks confessing insolvency grows along with new applications for rescue funds. A good example is Long Term Credit Bank -- the bank's technical insolvency was not confessed to the public until it was forced to show its books to authorities for the purpose of a government takeover. The $500 billion allocated for the rescue plan is negligible compared to the amount of non-performing loans borne by banks in Japan, aside from the fact that a public rescue is only short-term novocaine for the disease of unscrupulous lending. Japanese banks are also facing another problem: maintaining capital equal to 8% of the risk-based value of their outstanding loans for operating internationally, under auspices of the Bank for International Settlements. Daiwa Bank recently announced that it will terminate all overseas operations and reorganize into a local bank due to a failed struggle to meet the BIS' capital adequacy ratio. Japan is the world's largest creditor nation and its recovery, as I am sure you have heard again and again, is crucial to the rest of Asia, so expect its now-evident credit crunch to squeeze the rest of the region into deeper turmoil. Hong Kong The Hang Seng leaped pass the psychologically significant 10,000 hurdle last week, giving many local brokers and investors the feeling that the worst may be behind them. Since the Hong Kong Monetary Authority began buying up stocks en mass, the city's government has undoubtedly done a terrific job in fostering a deceptive sense of local confidence. The ban of short-selling activities has driven out hedge-fund speculators in the likes of George Soros and hence the Hong Kong dollar as well as the stock market had been stabilized. Whether the city's government chooses to admit, Hong Kong has lost tremendous amounts of foreign reserves in its recent battle with hedge funds and the number continues to dwindle at quite a rapid pace. To cultivate confidence, this year's Miss Hong Kong Pageant featured various contestants signing and dancing to lyrics boasting strong foreign reserves and reiterating the city's commitment to pegging the U.S. dollar. All of this pep is rendered absurdity considering the fact that Hong Kong's Gross Domestic Product fell another 5% in the second quarter. Retailers of all types, the backbone of Hong Kong's once vibrant economy, are closing shop one after another due to exorbitantly high rents and the people's aversion to frivolous spending. For those who have been able to survive, things have not improved as property prices are still overvalued by some 400%. The most important element to watch is the Hong Kong Monetary Authority's recently announced decision to sell stocks which they have accumulated by buoying the Hang Sang since it tumbled to the low 6000s. With the index now standing at 10,000, the city's government is tempted to unload its portfolio for hefty profits, partly because it is beginning to sense fiscal weakness, which only means the Hang Sang will retest its lows, to say the least. wallstreetcity.com