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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (21395)	11/14/1998 11:20:00 AM
From: jayhawk969	Read Replies (2) \| Respond to of 50167

Ike, Re Krugman, I agree with Krugman's logic. I thought in August that we would have a recovery based on false Japanese hope. The market desperately wants to believe. It came a little later than I expected and was more complex. The Japanese problem will come to roost at some point and it will negatively impact world markets. It all some so precarious right now. J.D.

To: IQBAL LATIF who wrote (21395)	11/14/1998 11:22:00 AM
From: James Strauss	Read Replies (2) \| Respond to of 50167

Japan: Ike: Japan's Banking problems are also tied to its overvalued real estate that's used as collateral for many bank loans... When real estate values were going to the moon the loans were leveraged up against those unrealistic values... Now, with real estate values at a fraction of their previous levels, banks are under water with those loans... Even foreclosure cannot cover the open balances on their loans... To me, the solution lies in stimulating the real estate sector with accelerated depreciation tax breaks for renovations and rental property... Also, increased tax breaks for buying and selling homes... That would send positive ripples throughout their whole economy... In the mid 80's when Congress took away the accelerated depreciation benefits in the U.S. real estate market, it collapsed... The solutions are there for Japan... They just have to act on them... Jim