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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!
LRCX 148.32-3.3%Nov 14 3:59 PM EST
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To: Math Junkie who wrote (6148)7/2/1998 12:39:00 PM
From: Ramsey Su  Read Replies (4) of 10921
 
Richard and thread,

just saw Bill Siedman interview on CNBC and need some help analyzing what was said.

First, the generic bad news is what appears to be Japan's intention not to close any bad banks. This, as far as I am concerned, means business as usual, when they are done screwing the taxpayers.

Then comes Siedman's guess. He thinks by the time the bean counters are done, there will be $1 trillion in bad loans. How much is this $1 trillion bad loan portfolio worth?

Let us just use a few numbers for the sake of discussion.

20% - $200 billion or $28 trillion yen
50% - $500 billion or $70 trillion yen

The current bail out plan is $30 trillion yen, with something like $13trillion to cover deposits and $17 trillion to cover loans (I may have the number reversed).

Is 20% low? Most likely.

Is 50% unrealistically high? Not really considering loans to Korea, Indonesia, Malaysia etc which may be completely unrecoverable.

I see a huge short fall here. Japan can be under funding the bail out by 4+ times. We are not talking peanuts. A trillion here, a trillion there, it soon adds up to be real money even if the yen drops to 180.

Auditors apparently are enroute to something like 19 Japanese banks. It will be a fun time, probably more hotel suicides to come (I don't mean to be funny on this). By September, we should have a much better picture.

Comments anyone?

Ramsey
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