SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Pastimes : Clown-Free Zone... sorry, no clowns allowed
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Perspective who wrote (44382)12/6/2000 10:51:00 AM
From: pater tenebrarum  Read Replies (1) of 436258
 
you definitely have Yen distortion there. when the Japanese stock market bubble burst, the Yen continued to soar.

imo it was the real estate bubble bursting (that began with an approximately one-year delay vs. the stock market) that did the most damage to their economy. lending did dry up when prices for real estate started falling. in the final years of the bubble completely hare-brained developments were financed by the banks, as there was a strong belief that real estate values were a one way street in Japan (every argument, down to Japan's lack of space - it is a relatively small geographical area after all - was used to justify absolutely crazy prices).
when these began to falter along with stocks, the banks were hit with a double, no, triple whammy: 1. since a portion of their equity capital consisted of their stock holdings, their capital-to-asset ratios plunged to dangerously low levels. 2. the sudden collapse in RE prices and demand suddenly led to a huge proportion of their loan books acquiring dud status. 3. the soaring Yen led to losses on their foreign bond holdings.
since the banks didn't want to admit to the size of their dud loans, they did the next best thing to keep the situation from worsening even more: they stopped lending. at the same time, big sickly customers that were all but insolvent, were kept alive with regular infusions, just so that the banks could escape having to declare their debts to be duds, i.e. what money they made available went to the most undeserving recipients.

that's it in a nutshell...note btw. that before the '90 collapse, Japanese banks were the envy of the world...they were the biggest players, and were considered invulnerable and invincible.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News