Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@netside.net>
Subject: Japan's economy (was Re: [CANSLIM] Worley's Weekend Weeview)
Date: Sat, 22 Dec 2001 17:38:35 -0500
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Hi Doug,
I am not sure I understand your question, so if I miss your point, =
please ask again.
Japan is currently suffering inflation in the midst of recession. That =
means they are making less while products end up costing more. That's a =
double insult to the second largest economy in the world. There are some =
indications that they are also trying to weaken the yen to make their =
exports cheaper on the world market, and thereby increase domestic =
business activity for their companies that are mostly exporters. But =
that also means the Japanese must pay more for any items they import.
At the same time, the ordinary Japanese citizen has no place to put his =
savings where he can get a meaningful interest return. Even for most =
Japanese corps, they are forced into buying Japanese govt bonds =
currently paying a yield of about 1.32%. Several years ago, there was a =
lot of media fear (and commentary) regarding what would happen when the =
Japanese started selling their holdings in US govt and corporate bonds, =
as their holdings were substantial. Truth is, while it likely sold many =
newspapers, it never really happened, as the safety and rate of return =
was far superior to anything the money could buy back in Japan. What =
money they have that they can invest here is likely to stay here until =
such time as there are more attractive prospects back home.
To date, I have not seen any credible reports of significant Japanese =
repatriation of their US investments, with the exception of isolated =
corporate cases where they had to do so to meet capital requirements =
back home. That is on a case by case basis, and related to companies =
usually on the verge of bankruptcy, or suffering major capital losses =
otherwise.
Tom Worley
stkguru@netside.net
AIM: TexWorley
----- Original Message -----=20
From: DOUG CHIURATO=20
To: canslim@lists.xmission.com=20
Sent: Saturday, December 22, 2001 3:52 PM
Subject: Re: [CANSLIM] Worley's Weekend Weeview
Tom
=20
I originally sent this last week after reading your WWW. I had some =
questions related to your Japan section. My ISP Qwest is combining with =
MSN and the transition occured while I've been traveling. So between =
some problems with that transition and with the list service it looks =
like my response to your WWW didnt get through. So anyway here's a copy =
of what I tried to send last week.=20
=20
=20
I have some combination question comments regarding the economy =
relating to comments in your weekly review. I'm very weak on this =
subject so please go easy on me. You mentioned that Japan is =
experiencing a pickup in inflation. They've been in a deflationary =
environment for most of the 90's havent they? so with this perspective =
isnt inflation, relative to the deflationary times, a good thing? On =
page 97 of the The Hedge Fund Edge Mark Boucher writes this paragraph =
'How long will the Japanese keep spilling money into our markets? =
Probably until Japanese domestic inflation heats up or until their =
economy picks up sufficiently to cut back the need for liquification.' =
(That book was published in '99) Up until this point havent the Japanese =
interest rates been almost zero. Havent the Japanese been one of the =
major buyers of our long term bonds making money with the difference =
between their short term rates and our long term rates. If they are =
starting to experience inflation will they be starting to raise rates? =
How much money have they already been pulling out of our bonds? Hasnt =
this been a big fear all along or have they already been cashing out of =
bonds. Sorry for all the questions. I just know so little about this but =
it does appear to have some importance in the whole scheme of global =
economy/stock markets. Hopefully you can help clear up some of my =
confusion.
----- Original Message -----=20
From: Tom Worley=20
To: CANSLIM=20
Sent: Saturday, December 15, 2001 8:18 PM
Subject: [CANSLIM] Worley's Weekend Weeview
EARNINGS WARNING SEASON
It's that time of the quarter again, and the news releases on what =
to expect from corporate America for the current quarter are starting to =
roll in, and will heat up next week. I get an almost daily email this =
time of the quarter summarizing what was released, and my overall =
impression is that more are raising expectations or confirming forecasts =
than are lowering expectations, both on revenues and earnings. In the =
3rd qtr, earnings for the S&P500 fell nearly 22%, worst fall year over =
year in a decade. For the 4th quarter, expectations are for a drop of =
19%, better but still not good. But with both INTC and CSCO saying nice =
things, as well as PG, even MRK's forecast of no growth for 2002 fades =
in importance as it is company related more than sector related.=20
- -------------------------------------------------------------------------=
- ---
JAPAN
What can I say? This second largest economy remains mired in =
government inaction and indecisiveness. The banking industry remains on =
the verge of collapse, overwhelmed by bad loans. This past week, one of =
the largest banks (Asahi) finally cut off credit to Aoki Corp, which =
promptly filed bankruptcy, leading to fears that other banks will start =
cutting off corps with whom they have long standing business =
relationships. On Thursday, the banking index (now at new 3 year lows) =
led the Nikkei to losses that wiped out what was made on Wednesday. =
Everyone seems to be worried, or even panicking, except the government =
who this week pulled off a successful devaluation of the yen, moving it =
to a three year low against the US dollar. While this may temporarily =
strengthen their exports, it will also raise the cost of imports, =
leading to more inflation during their recession. And it will also =
likely cause other devaluations of currency throughout Asia as those =
countries try to hold onto market share. China and Malaysia may be hurt =
the worst by this, as they have pegged their currency to the dollar, and =
will try to defend it. Ultimately, this could lead to another financial =
crisis similar to 1997 when Thailand started the domino effect. But with =
Japan, the biggest economy in Asia, starting the process, it could =
happen a lot faster this time.=20
- -------------------------------------------------------------------------=
- ---
FED CUT
The news wasn't that they cut 25 BP (basis points), it was that they =
left the bias in place, suggesting the possibility of another 25 BP cut =
at the January meeting.
- -------------------------------------------------------------------------=
- ---
ON THE ECONOMY
No surprise, at least it shouldn't have been, the auto makers =
couldn't keep up the Japanese style of zero percent loans in order to =
induce buying decisions. As a result, retail sales fell more than =
expected to 3.7% (expected was a 3.1% drop) after rising 6.4% jump in =
October (almost all on car sales). Still, that's nearly a 3% net for two =
months, guess we'll take that, even if Christmas sales at the retailers =
appear so far to be slower than anticipated. But the PPI (Producer Price =
Index) also fell more than expected, to 0.6% (expected was a drop to 0.3 =
or 0.4%), down further from October, hinting that inflation continues to =
be a no show.=20
- -------------------------------------------------------------------------=
- ---
WORLEY'S WATCHLIST WANNABES
Appears like I will have fewer stocks to consider this weekend
As always, Bx means a flat line "B"ase of "x" weeks, IMO. If I see =
other formations like c&h, double bottom, LLUR, CAT, RAT, I will say so.
ACS - LLUR
ACTN - RAT LLUR
AGM - B3
ASF - c&h, handle drooping on declining volume
BIOA - RAT LLUR
BLL - LLUR, earnings decline forecasted for Q4
BOKF - LLUR
BPRX - uptrending B5, stealth b/o Thursday
BVF - RAT LLUR
BZH - looking at this one again, I see a c&h on a c&h, unusual =
pattern, I suspect a weekly chart might smooth it out into a larger, =
stronger c&h formation
CACI - LLUR
CVBF - B8
DLX - LLUR
DNB - LLUR
FMT - c&h, b/o Friday, within 5% of pivot, low priced
FRED - LLUR
GAIA - saucer, b/o Wed, declining to support on lower volume
GAN - CAT LLUR
GFF - CAT LLUR
HRB - B2
ISLE - B2
ITRI - CAT LLUR
JCI - B5
JNC - LLUR
KSS - high handle
MATW - B3
MIMS - LLUR
NFI - LLUR
PHC - B10, tight range
RAH - LLUR
RKT - base on the handle, second handle??
RYAAY - B5
RYAN - LLUR
THC - B4
TIER - LLUR
Happy Hunting,
God Bless America, and all its military people
=20
Tom Worley
stkguru@netside.net
AIM: TexWorley
- ------=_NextPart_000_003D_01C18B0F.7BA70C00
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<META content=3D"text/html; charset=3Diso-8859-1" =
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<DIV><FONT size=3D2>Hi Doug,</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=3D2>I am not sure I understand your question, so if I =
miss your=20
point, please ask again.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=3D2>Japan is currently suffering inflation in the midst =
of=20
recession. That means they are making less while products end up costing =
more.=20
That's a double insult to the second largest economy in the world. There =
are=20
some indications that they are also trying to weaken the yen to make =
their=20
exports cheaper on the world market, and thereby increase domestic =
business=20
activity for their companies that are mostly exporters. But that also =
means the=20
Japanese must pay more for any items they import.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=3D2>At the same time, the ordinary Japanese citizen has =
no place=20
to put his savings where he can get a meaningful interest return. Even =
for most=20
Japanese corps, they are forced into buying Japanese govt bonds =
currently paying=20
a yield of about 1.32%. Several years ago, there was a lot of media fear =
(and=20
commentary) regarding what would happen when the Japanese started =
selling their=20
holdings in US govt and corporate bonds, as their holdings were =
substantial.=20
Truth is, while it likely sold many newspapers, it never really =
happened, as the=20
safety and rate of return was far superior to anything the money could =
buy back=20
in Japan. What money they have that they can invest here is likely to =
stay here=20
until such time as there are more attractive prospects back =
home.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=3D2>To date, I have not seen any credible reports of =
significant=20
Japanese repatriation of their US investments, with the exception of =
isolated=20
corporate cases where they had to do so to meet capital requirements =
back home.=20
That is on a case by case basis, and related to companies usually on the =
verge=20
of bankruptcy, or suffering major capital losses otherwise.</FONT></DIV>
<DIV> </DIV>
<DIV>Tom Worley<BR><A=20
href=3D"mailto:stkguru@netside.net">stkguru@netside.net</A><BR>AIM:=20
TexWorley<BR></DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: =
0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A href=3D"mailto:xdzcx@email.msn.com" =
title=3Dxdzcx@email.msn.com>DOUG=20
CHIURATO</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
href=3D"mailto:canslim@lists.xmission.com"=20
title=3Dcanslim@lists.xmission.com>canslim@lists.xmission.com</A> =
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Saturday, December 22, =
2001 3:52=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] Worley's =
Weekend=20
Weeview</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D2>Tom</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>I originally sent this last week =
after=20
reading your WWW. I had some questions related to your =
Japan=20
section. My ISP Qwest is combining with MSN and the transition =
occured=20
while I've been traveling. So between some problems =
with that=20
transition and with the list service it looks like my response to =
your=20
WWW didnt get through. So anyway here's a copy of what I =
tried to=20
send last week. </FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>I have some combination question =
comments=20
regarding the economy relating to comments in your weekly review. =
I'm=20
very weak on this subject so please go easy on me. You mentioned that =
Japan is=20
experiencing a pickup in inflation. They've been in a deflationary =
environment=20
for most of the 90's havent they? so with this perspective isnt =
inflation,=20
relative to the deflationary times, a good thing? On page 97 of the =
The Hedge=20
Fund Edge Mark Boucher writes this paragraph 'How long will the =
Japanese keep=20
spilling money into our markets? Probably until Japanese domestic =
inflation=20
heats up or until their economy picks up sufficiently to cut back the =
need for=20
liquification.' (That book was published in '99) Up until this point =
havent=20
the Japanese interest rates been almost zero. Havent the Japanese been =
one of=20
the major buyers of our long term bonds making money with the =
difference=20
between their short term rates and our long term rates. If they are =
starting=20
to experience inflation will they be starting to raise rates? How much =
money=20
have they already been pulling out of our bonds? Hasnt this been a big =
fear=20
all along or have they already been cashing out of bonds. Sorry =
for all=20
the questions. I just know so little about this but it does appear to =
have=20
some importance in the whole scheme of global economy/stock markets. =
Hopefully=20
you can help clear up some of my confusion.</FONT></DIV>
<DIV> </DIV></DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; =
MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A href=3D"mailto:stkguru@netside.net" =
title=3Dstkguru@netside.net>Tom=20
Worley</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
href=3D"mailto:canslim@lists.xmission.com"=20
title=3Dcanslim@lists.xmission.com>CANSLIM</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Saturday, December 15, =
2001 8:18=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [CANSLIM] Worley's =
Weekend=20
Weeview</DIV>
<DIV><BR></DIV>
<DIV><FONT size=3D2><STRONG>EARNINGS WARNING =
SEASON</STRONG></FONT></DIV>
<DIV><FONT size=3D2>It's that time of the quarter again, and the =
news releases=20
on what to expect from corporate America for the current quarter are =
starting to roll in, and will heat up next week. I get an =
almost daily=20
email this time of the quarter summarizing what was released, and my =
overall=20
impression is that more are raising expectations or confirming =
forecasts=20
than are lowering expectations, both on revenues and earnings. In =
the 3rd=20
qtr, earnings for the S&P500 fell nearly 22%, worst fall year =
over year=20
in a decade. For the 4th quarter, expectations are for a drop of =
19%, better=20
but still not good. But with both INTC and CSCO saying nice things, =
as well=20
as PG, even MRK's forecast of no growth for 2002 fades in importance =
as it=20
is company related more than sector related.=20
<HR>
</FONT></DIV>
<DIV><FONT size=3D2><STRONG>JAPAN</STRONG></FONT></DIV>
<DIV><FONT size=3D2>What can I say? This second largest economy =
remains mired=20
in government inaction and indecisiveness. The banking industry =
remains on=20
the verge of collapse, overwhelmed by bad loans. This past week, one =
of the=20
largest banks (Asahi) finally cut off credit to Aoki Corp, which =
promptly=20
filed bankruptcy, leading to fears that other banks will start =
cutting off=20
corps with whom they have long standing business relationships. On =
Thursday,=20
the banking index (now at new 3 year lows) led the Nikkei to losses =
that=20
wiped out what was made on Wednesday. Everyone seems to be worried, =
or even=20
panicking, except the government who this week pulled off a =
successful=20
devaluation of the yen, moving it to a three year low against the US =
dollar.=20
While this may temporarily strengthen their exports, it will also =
raise the=20
cost of imports, leading to more inflation during their recession. =
And it=20
will also likely cause other devaluations of currency throughout =
Asia as=20
those countries try to hold onto market share. China and Malaysia =
may be=20
hurt the worst by this, as they have pegged their currency to the =
dollar,=20
and will try to defend it. Ultimately, this could lead to another =
financial=20
crisis similar to 1997 when Thailand started the domino effect. But=20
with Japan, the biggest economy in Asia, starting the process, =
it could=20
happen a lot faster this time.=20
<HR>
</FONT></DIV>
<DIV><FONT size=3D2><STRONG>FED CUT</STRONG></FONT></DIV>
<DIV><FONT size=3D2>The news wasn't that they cut 25 BP (basis =
points), it was=20
that they left the bias in place, suggesting the possibility of =
another 25=20
BP cut at the January meeting.</DIV>
<DIV>
<HR>
</DIV>
<DIV><STRONG>ON THE ECONOMY</STRONG></DIV>
<DIV>No surprise, at least it shouldn't have been, the auto makers =
couldn't=20
keep up the Japanese style of zero percent loans in order to induce =
buying=20
decisions. As a result, retail sales fell more than expected to 3.7% =
(expected was a 3.1% drop) after rising 6.4% jump in October (almost =
all on=20
car sales). Still, that's nearly a 3% net for two months, guess =
we'll take=20
that, even if Christmas sales at the retailers appear so far to be =
slower=20
than anticipated. But the PPI (Producer Price Index) also fell more =
than=20
expected, to 0.6% (expected was a drop to 0.3 or 0.4%), down further =
from=20
October, hinting that inflation continues to be a no show.=20
<HR>
</DIV>
<DIV><STRONG>WORLEY'S WATCHLIST WANNABES</STRONG></DIV>
<DIV>Appears like I will have fewer stocks to consider this =
weekend</DIV>
<DIV>As always, Bx means a flat line "B"ase of "x" weeks, IMO. If I =
see=20
other formations like c&h, double bottom, LLUR, CAT, RAT, I will =
say=20
so.</DIV>
<DIV> </DIV>
<DIV>ACS - LLUR</DIV>
<DIV>ACTN - RAT LLUR</DIV>
<DIV>AGM - B3</DIV>
<DIV>ASF - c&h, handle drooping on declining volume</DIV>
<DIV>BIOA - RAT LLUR</DIV>
<DIV>BLL - LLUR, earnings decline forecasted for Q4</DIV>
<DIV>BOKF - LLUR</DIV>
<DIV>BPRX - uptrending B5, stealth b/o Thursday</DIV>
<DIV>BVF - RAT LLUR</DIV>
<DIV>BZH - looking at this one again, I see a c&h on a c&h, =
unusual=20
pattern, I suspect a weekly chart might smooth it out into a larger, =
stronger c&h formation</DIV>
<DIV>CACI - LLUR</DIV>
<DIV>CVBF - B8</DIV>
<DIV>DLX - LLUR</DIV>
<DIV>DNB - LLUR</DIV>
<DIV>FMT - c&h, b/o Friday, within 5% of pivot, low priced</DIV>
<DIV>FRED - LLUR</DIV>
<DIV>GAIA - saucer, b/o Wed, declining to support on lower =
volume</DIV>
<DIV>GAN - CAT LLUR</DIV>
<DIV>GFF - CAT LLUR</DIV>
<DIV>HRB - B2</DIV>
<DIV>ISLE - B2</DIV>
<DIV>ITRI - CAT LLUR</DIV>
<DIV>JCI - B5</DIV>
<DIV>JNC - LLUR</DIV>
<DIV>KSS - high handle</DIV>
<DIV>MATW - B3</DIV>
<DIV>MIMS - LLUR</DIV>
<DIV>NFI - LLUR</DIV>
<DIV>PHC - B10, tight range</DIV>
<DIV>RAH - LLUR</DIV>
<DIV>RKT - base on the handle, second handle??</DIV>
<DIV>RYAAY - B5</DIV>
<DIV>RYAN - LLUR</DIV>
<DIV>THC - B4</DIV>
<DIV>TIER - LLUR</DIV>
<DIV> </DIV>
<DIV>Happy Hunting,</DIV>
<DIV> </DIV>
<DIV>God Bless America, and all its military people</DIV>
<DIV></FONT> </DIV>
<DIV><FONT size=3D2>Tom Worley<BR><A=20
href=3D"mailto:stkguru@netside.net">stkguru@netside.net</A><BR>AIM:=20
TexWorley<BR></FONT></DIV></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
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