John Pitera's Market Laboratory Message Board

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Strategies & Market Trends : John Pitera's Market Laboratory

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To: t4texas who wrote (5675)	2/20/2002 2:17:42 AM
From: macavity	Read Replies (1) of 33421

I am not sure why. What you have said sounds about right to a non-economist-finance guy like me. Refinancing the financial sector. One thing about Japan, and this is cultural is that like most they hate (really hate) to admit that they are wrong. They need to stop the rot first. Bankrupt banks are still lending (new loans) to bankrupt companies. Whenever a large company is about to go under banks are forced to extend loans to them. This is why the problem has just got worse. The idea is to allow new business to grow, but the banks are afraid to lend and only do so when the Powers-That-Be force them to. This only occurs when some old-skool bankrupt retail/construction/manufacturing (delete as appropriate) company needs cash. Shinsei Bank (the new one formed by that US takeover group) is always been hauled up by the MOF for not lending enough to these companies. Their argument is that these companies are insolvent and cannot pay the money back. This is usually not sufficient. -macavity

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