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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Keith Feral who wrote (113596)	2/18/2002 2:01:14 PM
From: Jim Willie CB	Read Replies (2) \| Respond to of 152472

Moody's is considering double downgrade of Japan-based debt that would put Japan below Botswana and on par with Cyprus very deep savings are perceived among Japanese people until you dig deeper and discover debt is 6x national GDP bankruptcies are rising fast money exiting banks, going into gold big bank failures result in huge withdrawals of money held abroad $1036 billion reported in Japanese held foreign debt and it has begun to head back home Qualcomm depends upon Japan "Japan is in great financial condition" ??? item notes from John Mauldin of Millenium Wave: - Consumer prices in Japan are dropping at 4% per year. "We are already in a deflationary spiral," says Takatoshi Ito, professor of economics at Hitotsubashi University. "This makes debtor balance sheets much more difficult to manage, so they join the ranks of non-performing loan companies. They lay of workers, further depressing aggregate demand, thus creating more deflation, and so on." (London Financial Times) - Moody's said it may downgrade yen-denominated debt by up to two notches to a rating of A2, which would force some foreign funds to sell Japanese Govt Bonds as too risky. This would put Japan below Botswana and in the same category with countries like Cyprus. - "Consider the notion that, with perhaps $11 trillion in savings, the Japanese have enough wealth to cope. It sounds as if they do, until you realize total on- and off-balancesheet claims on the household, corporate, and government sectors in Japan are about $30 trillion, according to estimates by Goldman Sachs. That sum is six times Japan's $5 trillion GDP. The total of US public and private debt is $19 trillion, two times GDP. - "It took only the collapse of a midsize Japanese bank, Hokkaido Takushoku (with assets of $80 billion), to expand Thailand's problems into a regional crisis, says Thomas Byrnes, a sovereign-risk analyst for Moody's. Within three months of the bank's collapse, he says, Japanese financial institutions pulled $118 billion out of the global economy, mostly from Asia and Eastern Europe. South Korea, the world's 10th largest economy, was effectively bankrupted by the withdrawal of Japanese money. - "The four biggest of Japan's troubled banks alone have total claimed assets worth $3.7 trillion. It would not be only Korea and other Asian countries that would suffer if these banks' latent troubles erupted. Japan is the world's main source of capital. Much of its $3 trillion in overseas assets is in liquid instruments, such as $333B worth of USTreasurys, and bank loans to the US and Europe worth $340B and $363B respectively. Byrnes sees signs that Japanese banks have already begun to repatriate some of their money." (Forbes) - "We are very afraid of Japan becoming another Argentina," says Taiichi Sakaiya, who was Japan's economics minister until recently. - Japan still has a huge surplus, but it is falling. It used to be that exports were the most significant part of the surplus, but not anymore. There has been a recent rise in income, after it had been dropping for an extended period. The rise in income reflects Japanese investor growing appetite for overseas securities, particularly foreign bonds, which are becoming more attractive because of low domestic interest rates and a depressed stock market. The fall in the yen from last November also boosted the rise in overseas income. - "Japan is living more off income from previous investments than from actively exporting," said Peter Morgan, economist at HSBC Securities in Tokyo. (Financial Times) - Japanese bankruptcies rose 10.6% in January, starting a year that may see a record number of companies go bust, analysts said. The failed companies owed 1.43 trillion yen ($10.8 billion), the credit researcher said. "Bankruptcies are off to a very worrisome start," said Tokyo Shoko's Hirotake Araya. "Company failure will close in on 20,000 cases this year," a level reached only once before, in 1984 when a record 20,841 companies went bust. - On March 31, the Japanese government guarantee of bank deposits goes away. Already 9% of deposits in small banks have evaporated. That is part of the reason for large Japanese purchase of gold. They have to put their money somewhere. In Japan, gold is in a bull market, up over 50% in the last few years in yen terms. - The level of bad debts at Japanese banks is staggering. Many outside analysts believe Japanese banks are essentially bankrupt. Their accounting rules would make Enron executives blush. They do not mark to market the stocks on their books. -------- sinking #2 economy they prop failing companies selling products at loss national debt at Banana Republic levels they could flee the yen and create a worse USdollar bubble expect exported Japanese deflation to continue a foreign liquidity crisis is likely / jim