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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!
LRCX 147.44-0.6%3:59 PM EST
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To: Mason Barge who wrote (5003)3/18/1998 11:47:00 AM
From: Robert Douglas  Read Replies (4) of 10921
 
Actually the greatest similarity over the past 7 years between the US S & L crisis and Japan's bank crisis is that they both had their roots in lending backed by inflated asset prices. I say asset and not just real estate because Japan had the double whammy of an over valued stock market along with over valued real estate. You may remember reports about land values in Tokyo being as great as all land in the United States. It has only been recently that commercial lending has become a problem, a result of the currency precipitated crisis in Asia. The solution to Japan's problems is exactly the course that the US took. Recognize the bad debts and re-capitalize the banking industry. Both of which have already begun. ( See page A19 of today's WSJ) The "open-tap" lending that you mention does not need to return for Japan's economy to grow. It was the open-tap that caused many of the problems. What Japan needs is responsible banking, responding to the needs of Japan and the region. In addition foreign (to Japan that is) banks that are better capitalized will step in and lend in Asia. There is no logical reason for Japanese banks to be the largest in the world any longer.

I think Japan has already had the serious recession you refer to and will come out of it quite soon. IMHO.
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