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Strategies & Market Trends : Waiting for the big Kahuna

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To: Lazarus_Long who wrote (10678)	12/1/1997 5:02:00 PM
From: Staff	of 94695

Bill Magner's link touched on some of the pretty good concepts that I think give you the basic senerio. You can E-mail me and I will provide you with sites where you can verify who the 20 largest banks are etc. to confirm the things I posted. Key points. Japan is the world's richest economy. It is the world's largest surplus economy So .. in essence...the major financial institutions are in trouble or collapsing the world's richest, strongest economy. Bummer!... oh well... Hey wait! What about the great Ol USA... oh yeah!... We.. the US.. Is the world's largest debtor nation. Our country runs great as long as it can borrow, borrow and borrow some more. Cut of the goverments bond and bill autions for a few months and tell me how we do if we can't borrow money to open the doors every morning. But hey... we're up another 180 and change and were over 8000 in the dow and life is good. Besides... its the new world .. things are different know. Dow 12,000 here we come. The only thing that can chance that forcast is of we hit it. Then it will be dow 15,000 then 20,000 because the game never ends.....Just keep buying!!!! I heard this world has changes stuff way back in the 80's when hard asssets were king. There were no bulls and bears only gold bugs and those bugged about gold going up every day. :-) Inflation was here to stay. Ward Clever's wife got a job and Oil was going to $100.00/ barrel next week and never comming down. Gas lines where here to stay and intrest rates would nver see single digets in our life time again. The world was different and I beleived it. Daaaa.. And why not.. all the esxperts had it pegged. Oil...there is only so much of it and we where pumping it as fast as we could out of the ground. Inflation would never die... when did e\anything ever go dowen in price right? You better buy silver at $48.00 today because Bunker Hunt would and he was the Bill Gates of his day.Even he knew it was headed torwards $100.00./ OZ.:-0 Well ... opps... what happened to tall the experts predictions. I mean could IBM really think their PC junior markiet would really ever flop? Even Bill Gates thaought 64K would be all the memeory people would ever need in a PC:-) So much for the experts.... So excuse me if I'm over cynical and don't jump for joy that the bull is not dead t\and the new world order still rules. The bear is dead right? yeah yeah yeah..... Cool!.... but if you want another side of it... here is some things to ponder... Until recently Yamaichi was japans 3rd largest brokerage firm. Till a week ago it was #4. Now its closed its doors and there are not enough assets left the even allow someone to come in and try to absorb it to and save it as the established 100 year old entity it was. Loses were quoted initially at 25 billion US. Investigators are now revising that number as high as 75 billion. Remember when your a CEO in Japan failure is not an option. You fail you don't work again for anyone. It is no option. For them to throw in the towel you knew it was so bad it made black look white. Japans 11th largest bank .. Hokkaido Takushoku Bank Ltd. .. (who are they... well they are bigger than Citicorp how is that to put it in perspective!) .. a prime lender to Yamanichi ... also failed on Nov. 17th. Sanyo Securities Co. .. a medium sized brokerage firm... also toast. Pacific securities also went broke recently. To understand the importance of this system you have to understand how it works a little. In Japan, you don't admit failure at any cost. In the past the Japan government has always cajoled other banks and security firms to provide money to keep troubled financial companies afloat. However, the entire industry is now suffering making this policy now unworkable. In other words, they just plain ran out of cash. Finance Minister Mitsuzuka told his ministry little over a week ago now that it had off the book debts of 2.06 billion. They have in s sense spun the bad debt wheel of fortune around hoping it doesn't land on any one bank long enough to get caught. Today you bail me out and next week I bail you out and nobody gets caught. Only deal is./.. now neither of us have any money to shuffle around the campfire as it where. Everyone's tapped. In Asian banking it is common practice for everyone to cover each other's loses. But... everyone must be tapped or it's so really bad that nobody even attempted to save Yamaichi. This is just not done in Japan. Family names are disgraced and people in high places lose face. It's just not done. But they did it! The government says they will now use public dough to bail out the depositors but not to save the institutions themselves. Here is the bad part. In may or June of this year. the total nonperforming loans from the top 20 banks in Japan amounted to 73.8 billion US dollars. Many have now speculated this to have risen to 100 billion since that time. 100 billion... almost tallying real money by political standards :-D Now lets add: Mexico who still owes us dough. Mexico was what 40 billion or so. South Korea who like Yamiaichi started at a lower 20 billion number but once you counted up the furniture that was still not paid for they now need 50 billion according to the IMF. Lost that 30 billion in the rounding off I guess:-) But they use lots a of chairs .l. they are the worlds 11th largest economy not some banana republic that needs saving in Mission Impossible 2.:-D Then you have Thailand where the IMF committed 23 billion. Sources say they also will need another 30 billion before all that furniture is paid in full:-{ Here is the point to it all... Add'er all up and up and you're approaching trillion dollars before your all done ... as they say in the business... that's allot of money even by Washington standards. Japan holds 25% to 35% of all government securities. That's where they recycled their balance of trade dollars. Their domestic economy is dropping and on the verge of being in shambles if the government does not enact some drastic measures. Are they going to take the money home to save the institutions or are they going to let them go under? They have no cash to play bail our roulette anymore as seen via Yamaichi securities. The public sector is going to save the checking accounts but not the CEO's villa on the golf course. They need their money. You think they are going to continue to finance our US economy while starving their own? Bottom line: What Japan does in the days and weeks ahead will tip the scales. Clinton knows it. Notice how when he left the summit he said the following " The key to resolving the crisis in Asia will fall upon the leadership demonstrated by Japan. They have the strength and resolve to lead Asia out of theis crisis. I am confident that with Japans commitment this crisis can be resolved. I don't know about you bu I think slick basically said: What I heard out of all this is If you guys think for a moment that your going to cash out of the US allowing everything to crumble to save your hides, it's going to be the fall guys not me!" You bail and I just made you the fall guys... tag... your it!!! That may sound cynical but I think it's not far off the mark. You know I don't like the guy because I think he's take money out of the church collection boxs but man I have appreciate how good he is at being so bad. This guy is so slick... I thank god he's on out \r side. Or... I think he's on our side:-0

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