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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: frankw1900 who wrote (3320)	10/30/2001 10:40:02 AM
From: ahhaha	Read Replies (1) \| Respond to of 24758

This puzzles me. The press has created the image in your mind that there is a puzzle. Does that mean that there is a puzzle? Couldn't the shareholders have taken their hit ten years ago and been done with it? Once the image in your mind is formed, you give it features which it doesn't originally have. Now you're asking a question about a fictitious feature of your own invention. My instinct tells me there is something crooked in all this It is this suspicion, asymmetric information, that leads to putting crooks in power. but I don't know that. But that doesn't matter. Making the wrong choice is equally probable under asymmetric inference built on the edifice of the image in your mind. I've read that bank, industrial and real estate companies are so interlocked in their loans and shareholdings that the whole commercial edifice would come down. This is another extrapolation of your own invention after having been mislead by the sensationalist press. In particular, "commercial edifice would come down", has no meaning, but is alarmist which was the feeling the press intended to induce in you. But there is nothing men ravel that others can't unravel...Or they could just start over - the Dutch did something like that after the tulips didn't they? No. This is incoherent to a degree but I've never come across anything like it. The press has succeeded in deluding you. Why did you let them do that?

To: frankw1900 who wrote (3320)	11/1/2001 1:41:01 AM
From: ahhaha	Read Replies (2) \| Respond to of 24758

TOKYO, Nov 1 (Reuters) - Japan's ambitious plan to turn a state-run loan collection company into a jack of all trades for its banking sector clean-up may be a step in the right direction, but it's easier said than done. The Resolution and Collection Corp (RCC), set up in its current form 2-1/2 years ago to buy non-performing loans from banks and recover funds by collecting collateral, is eager to rise to the occasion. But the expanded mandate is creating new dilemmas, RCC President Akio Kioi told Reuters in an interview. The government is trying to pass legislation in the coming weeks that would allow the RCC to buy bad loans more aggressively, repackage those loans into trust funds for sale to investors and even rehabilitate troubled borrowers. All that sounds fine, but it doesn't mean a clear direction has been set, particularly with mixed messages coming from the government on how much risk taxpayers money could be exposed to. ``Expanding the role of the RCC -- considering the importance of disposing of bad loans, deteriorating economic conditions and other factors -- is a step in the right direction,'' Kioi said. ``But I think there is some discrepancy in the messages that we are getting.'' For one thing, Prime Minister Junichiro Koizumi's structural reform policy manifesto published in June has positioned the RCC as the main instrument in resolving the bad-loan problem, but the RCC's hands are tied by the golden rule that it cannot lose taxpayers' money. To take on a bigger role by buying more bad loans, it must bid at aggressive prices at banks' auctions, raising the risk that it would incur losses in the future. ``It doesn't say anywhere that we have to buy more loans but everything that has been said points in that direction -- that we must be the main player in bad-loan reduction,'' Kioi said. "If we were to be the main player, we have to work on more loans. Would we be living up to expectations if we handled only 1/10th or 1/20th of the assets banks need to dispose of? ``But if we are required to have the winning bid constantly, that would be a problem. There are mutually exclusive elements in the mandate.'' Kioi said there were some 55 private-sector ``loan servicer'' firms against which to compete at those auctions. U.S. COUSIN The RCC is often compared with its U.S. cousin, the Resolution and Trust Corp (RTC), which helped the U.S. banking industry recover from its crisis in the early 1990s. But while the RTC only had to handle assets of savings-and-loan firms that had already gone under -- which represented a small portion of the entire U.S. banking industry -- the RCC must deal with banks that are much bigger in size and not too keen about selling off loans at a loss. The banks' foot-dragging has been a major reason Japan's once mighty economy, the world's second largest, has struggled for over a decade despite a series of government fiscal stimulus packages and interest rates near zero. The Koizumi government has pledged to persuade banks to dispose of their core bad loans, which total about 19 trillion yen ($155.2 billion), within a few years, but some experts put the overall amount of problem loans at nearer 150 trillion yen. The RCC, which currently has about 2,500 employees, will likely get more staff reinforcement from banking industry groups in the coming months, but the task ahead is huge. The RCC plans to market its first securitised bad-loan trust by the end of the fiscal year on March 31, although it could come before the end of the calendar year, Kioi said. The offering is likely to be slightly bigger than 10 billion yen, Kioi said, adding that he could not tell at this point what sort of yield level the RCC could provide. On the corporate rehabilitation programme, the RCC set up a new division on Thursday. It is also considering forming an internal committee to select which borrowers would be eligible for the programme. In that selection process, advice from the originator banks would be a key factor, Kioi said. ``Banks which sell us loans know about the borrowers very well. So we could ask them to give us a tip-off if the borrower should be considered for rehabilitation,'' he said. Asked about potential political intervention in the selection process, Kioi said outside pressure was nothing new to the RCC. ``Even in our conventional loan collection business, there have been a lot of 'requests' from the outside. But we have never budged,'' Kioi said. Still, many industry experts worry about politicians exercising undue clout. One idea discussed by ruling party officials last month was to make the RCC buy bad loans at their book price -- notional value minus loan-loss reserves -- although the suggestion quickly disappeared after fierce criticism by experts that it was an undeserved sweetener for banks. Key phrases: But I think there is some discrepancy in the messages that we are getting.'' but everything that has been said points in that direction Would we be living up to expectations So we could ask them to give us a tip-off