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Technology Stocks : Compaq
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To: Harry Landsiedel who wrote (31468)8/24/1998 12:04:00 AM
From: Night Writer  Read Replies (1) of 97611
 
Harry,
I recall an article about Japanese Banks having a crisis if the Nikei goes below 15000. Can't for the life of me remember all the reasons.

What I do remember is: It involves the banks having assets invested in the market. Japanese law permits this. If the value of the assets fall below a certain point it effects the bank's reserves. I think they have to start calling loans to get the amount they lend in line with the value of the assets. At that point, bad loans they are not recognizing on the books start showing up. When those show up, the loss has to be marked off against the assets. This forces the calling of more loans, and so forth. I think you get the picture.

Guess we are about to find out if this is true or not. Wish I could remember where I read this. Does anybody else have any knowledge on the topic? Everybody cross your fingers that this analysis proves to be inaccurate. A Japanese banking crisis will not play well in the market.
NW
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