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

To: Sam who wrote (7426)	11/6/1998 2:55:00 PM
From: Ramsey Su	Read Replies (2) \| Respond to of 9980

Sam, I looked through my old econ text books and found no explanation for current phenomenom. Fed cuts rates but bond yield goes up, why? US interest rates go up but USD goes down, why? Japan savings rates go to zero. Why are Japanese not buying USD instruments? Japan has big bang, opening their financial markets. If I am Japanese, I would be rushing to buy some US stuff. That would explain the strength of the US stock market but why not the bond market? If Japan is an example of how the liquidity trap renders conventional monetary ineffective, why is a half % cut in Fed rate viewed by the market as happy days are here again? Every government, especially ours, is manipulating the market these days. Is this the end to free markets? Should we feel comfortable that Greenspan and Rubin controls our financial well being or should we be worried? I sure have a lot of question marks today. Ramsey