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that
is why they call it the wall of worry
<FONT face=Tahoma
size=2>-----Original Message-----From: Steve Walker
[mailto:steve@xxxxxxxxxxxxxxx]Sent: Friday, February 01, 2002 9:55
AMTo: realtraders@xxxxxxxxxxxxxxxSubject: [RT] General
commentGoing into today's trading we are essentially
back where we were lastTuesday morning before the drop and recovery.
At that time, we were ina downtrend possibly looking to retest the Sept
low during February. There are still a passle of problems to contend
with. Consumerspending is erratic, corporate profits have yet to
return, and captialspending is weak. All of these have to improve
before a sustained bullmarket can reappear. The Enron
malaise has fired a warning shot across the bow. The repealof the
Glass-Steagall Act, special purpose entities, and
ineffectualauditing has created the possibility of lower prices
waterfalling into acascade of corporate bankruptcies. Failure to
deal with such issues haskept Japan in a never ending quagmire (see
comments below).For sure there will be rallies, but we are not out of
the woods by along short. Use stops and keep 'em
tight.Re: Japan The Nikkei plunged another 23% in
2001, down a staggering 73% from its peak. The yen has crashed to
record lows. The central bank recently acknowledged that bad loans
are fully 25% more than the previous estimate of $1.2 trillion.
And now, here's the story on the next leg down:
Dozens of Japanese banks will fail, triggering a whole new collapse in
Japan's stock market. For over a decade, the
Japanese government has desperately tried to turn its economy and stock
market around -- not just two or three times, but a total of TEN
times. Every single attempt at intervention was a flop, a total
failure. Now, with the Nikkei down 73% and economic
conditions in Japan continuing to deteriorate, foreign investment
powerhouses are looking for the exits. Merrill Lynch will close most
of its 30 offices in Japan. Charles Schwab, the biggest US
discount broker, is shutting down all of its online Japanese
operations. Morgan Stanley Dean Witter is pulling out,
too. Japanese banks are about to get KILLED. Dozens
of them are already saddled with over $1.5 trillion in bad
loans. They have no way to dig themselves out. Many will fail,
including one giant Japanese bank with more deposits than CitiGroup and JP
Morgan Chase combined. The flight of foreign capital
and the bank failures will trigger a whole new collapse in Japan's
economy. Industry will come to a virtual halt.
Unemployment will go through the roof. And the stock market will
crash through the floor. Japan is
the largest or second-largest trading partner of nearly every significant
East Asian country, including China, Taiwan, Thailand, Indonesia,
Korea, and the Philippines. So Japan's troubles are pouring over
onto them. There are civil wars in Indonesia and a
terrorist rebellion in the Philippines. Taiwan, Singapore, and
Korea are suffering recessions. Stock markets are getting
creamed in Taiwan, Malaysia, the Philippines, Indonesia, and Hong
Kong. These countries were just barely recouping from the 1997-98
depression. And now, their largest trading partner is going into
collapse. It's devastating. Japan's troubles are
even beginning to spill over to Europe. Unemployment is running
nearly twice as high as in the US. Consumer confidence is crashing
through the floor, and a whole new tech wreck is underway.
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