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To: Bill Harmond who wrote (28137)	11/25/1998 2:55:00 AM
From: JBL	Respond to of 164684

Hi William, Never thought I'd hear you mention the world "deflation", but I admire you for having an open mind. There is no doubt that we are faced with worlwide deflationary pressures due to the success of perverted concepts such as Japanese Keiretsus /Korean Chaebols / Chinese Industrial Dvpt policies, which were all subsidized, sustained by corruption, and export oriented. What we have seen in commodities is the first wave of a deflationary process which is now making its way up in the manufacturing chain. Years of high growth in the US and Asia has led to over investment and overcapacity, and US and European consumers alone will not be able to absorb these excesses for much longer, especially in a context of reduced profits, and stronger unemployment. Clinton was told by some smart guy that Japan was key to restarting Asian economies and world growth. The problem is that 1.the stimulus packages, as huge as they look, are not even enough to contain the massive wealth destruction going on, and that 2. a quick restructuration of the Japanese economy is absolutely unthinkable, mostly for cultural reasons. The Japanese Gvt will restructure as fast as their economy deteriorates. They have huge reserves and will spend them on maintaining their subsidized industries at the expense of US companies, and Japanese taxpayers. Case in point : yesterday, the latest idea was for the Government to buy real estate (at 4 times the price of London real estate), presumably to help their banks. This comes after intervention in the stock market, recapitalisation of banks that continue to lend to deadbeat companies, and voucher programs. In this tremendously risky context, it really is enraging to see people like Goldman Sachs encouraging investors to allocate even more of their resources to stocks. Just like in the case of internet stocks, the market has become a game of the greater fool.

To: Bill Harmond who wrote (28137)	11/25/1998 8:39:00 AM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

I think the market is at a crossroads, and the CRB Index may well tell the tale here. I know I am going to sound stupid here and I could look this up but what is the CRB Index? What does the acronym CRB mean? I never thought you were. I meant to say it isn't fun leaving this much on the table I know it would be but who would have guessed the run would have gone this far? No one ever went broke taking a profit. You may not want to hear this, but I thought you did very well:-) I should have done as well. Glenn