JAPAN-Nikkei-Time to go back up? Message Board

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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up?

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To: fut_trade who wrote (1089)	6/9/1998 8:59:00 PM
From: Step1	Read Replies (1) of 3902

Peter, I strongly disagree here... >>>If I recall one of Jim Womack's (Sloan School at MIT) lectures correctly, Japan overcapacitized for the bubble. It wasn't declining property value that caused havoc, but the huge capacity Japanese companies developed for it's bubble domestic and export markets.<<< I am 99.9% certain that the real estate brush fires that swept the islands were responsible for: 1- undue speculation in land (by individuals and companies alike) 2- excessive borrowing 3- huge "bad loan" problems Japan is based on land, land, land. A lot of the loans extended to the big conglomerates were based on land assets calculated at bubble prices. Now that these properties have lost 60% or more of their values, they find it hard to meet their borrowing terms. Over capacity is a world wide phenomenon, not a Japanese one only. sg

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