***JapBank Holdings*** Who's afraid of the big bad wolf? Japanese banks got a bit of a gap in their finances eh. Bad luck for them. It's easy to be optimistic and unworried [more or less] over all these shenanigans because New Zealand lived through the lot during the 1980s and at a similar scale to what you are seeing around the world.
We had a socialist economy which was big-bang deregulated in 1984, with masses of privatisation of government loss making industry and business. We had massive, speculative and naive debt-financed [by mortgages on houses and using credit cards, with housewife investment clubs] stock market gambling on a massively rising debt financed stock market. Which ended with a bigger bang in Oct 1987, when you people also played at having a stock market crunch. Yours lasted only a few months before it got back up. Ours is still about the low water mark, though half the companies don't exist anymore. We had Bank of New Zealand going bust, [and other banks too], being bailed out in a transfer of taxpayers' money to shareholders of the banks when their absurd property and corporate 'investment' loans turned sour. We had massive unemployment - up to about 12% I think. We had currency runs resulting in a large devaluation in 1984 as speculators forced the situation. We had a constitutional crisis when one party lost the election but the outgoing PM wouldn't hand over control [thankfully brief but long enough to cause problems]. We had a terrorist bombing [by the stinking Frog government of Mitterand] with USA and Pommy Bastard complicity as a warning of what our antinuke policy would get us from our friends who were keen to protect us from bad people. We had a recession that lasted for several years during which time many people were forced to sell their houses. We had interest rates for depositors around 15% and mortgages higher than that - I think about 20%.
Then we got the bad news...
No, just kidding. But we have experienced quite a lot. And you know, the sun still shines, the golf courses are full, unemployment is down to 7%, things are good. The bottom of the heap are still unemployed and not too happy of course, but there are half as many as there were and they are much better off, with televisions, phones, cars and nearly everything way way cheaper than they were in the bad old days.
So, yes, you don't want to own speculative, over-borrowed companies. But really, you can ride these things out well if you are prudent, invest in the right places, have some marketable skills and behaviour, keep off the credit cards, excessive debt and don't sell at the bottom.
So, most of the Jap banks are bust. No worries. Don't copy New Zealand which simply donated taxpayer money to the shareholders.
Wait until the share price of a bank reaches 1 yen [not per share, I mean for the whole company], then buy it for 1 yen, using taxpayer money. Print a hundred billion yen, refinance the bank by lending the bank that money at 1% interest. Hey presto! The bank doesn't default, the depositors don't lose their money, the shareholders do, the borrowers still have somebody they owe money to, but the loans don't need to be called in. Any problems with that? Merge some of those taken over banks into JapBank Holdings Limited. Sack all the boards of directors, 100s of the top managers, half the staff who shouldn't really be required given the lack of lending needs.
To maintain some exchange rate stability, ask Alan Green$pan to print a few SuperDs and lend them to some credit worthy Yankee Banks who can then take over a few of the had it Japanese banks. To keep production racing along, Qualcomm can borrow some of Alan's freshly minted SuperDs and do some vendor financing of cdmaOne networks in Japan.
Japanese banks in trouble? No worries! Unless you are a Tokyo Mitsubishi, Dai Ichi Kangyo or other bank, shareholder, director, senior employee or one of the unlucky middle management ranks. Tellers could be thinned out too. They can retrain and get jobs selling cdmaOne handsets on street corners, installing infrastructure, setting up billing, and all the rest.
Of course, the loony Japanese guy quoted will have to be told to get lost and get a real job. He can blame the USA all he likes, but the Japs were running their own banking system.
All good fun. As long as we don't get too much of Paul Krugman's serial and parallel stupidity, things should round out happily, avoiding [in the USA though not in Korea] the shambles NZ experienced. The stock market will have seen a lot of shares transferred to Mr Chicken Little who prudently held some cash knowing that the improvident would be cleaned out. The credit card borrowers will return to work, chastened, saddened, poorer, despising the stock market and wondering what happened.
Within a few months, the USA [though not Korea] will be heading back towards 9000 as the value in companies like Qualcomm is recognized.
Life's a giggle.
Mqurice |
