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Strategies & Market Trends : Tech Stock Options
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To: donald sew who wrote (57882)11/21/1998 12:05:00 PM
From: HairBall  Read Replies (1) of 58727
 
Donald: Did you see the report on “NightLine”last night (Friday 11/20) about the Japanese Banking Crisis?

The majority of the money center banks in Japan are referred to as “Zombies”. This is because they are more than a “trillion” US dollars in debt. They have been bankrupt for years.

That compares to the Savings and Loans Crisis in the US this way:

The US Savings and Loans debacle losses were 100 something “billion” dollars. This was equivalent to about 2% of the US annual domestic product.

Japanese Money Center Banks losses are over one “trillion” US dollars and growing daily. This is equivalent to approximately 25% of the Japanese annual domestic product.

There are several ways for the Japanese Government to deal with this crisis. All solutions require the Japanese public to pay for it. I will not review the various solutions proffered. Let's just say, none were good.

The concern for the US is that the Japanese will need to repatriate their investments from the US (and Europe for that matter) to help pay for this crisis. This will have a major impact on the US economy and would rocket interest rates on US Treasury Bills.

This Japanese Banking crisis is a time bomb whose clock has stopped ticking. It is out there and it will NOT go away.

Regards,
LG
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