Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: lurqer who wrote (40110)	10/7/2002 2:25:44 AM
From: dawgfan2000	Read Replies (2) \| Respond to of 52237

Nikkei gets hammered. biz.yahoo.com Nikkei hits 19-yr low on fears of bad-loan shakeup Monday October 7, 1:50 am ET (Updates to mid-afternoon) TOKYO, Oct 7 (Reuters) - Tokyo stocks crumbled on Monday to a fresh 19-year low, led by banks and their debt-ridden borrowers on chances that a tougher stance on bad loans would trigger a wave of corporate failures that could ripple through the economy. The market benchmark Nikkei average (^N225 - News), after shedding as much as 4.18 percent in the morning to a low of 8,650.36, was down 3.65 percent at 8,698.14 by 0532 GMT. The broader TOPIX index of all first-section issues was down 3.0 percent at 864.81. The falls came as investors factored in a near-term scenario of big company failures and high unemployment if the government adopts a tougher stance on bad loans. Embattled retailer Daiei Inc (Tokyo:8263.T - News) and other debt-racked corporates plunged yet again on concerns banks will be forced to take action on problem borrowers. Toyota Motor Corp (Tokyo:7203.T - News) and other blue-chip exporters also retreated after a slide in U.S. stocks and fears of a double-dip recession in Japan's biggest export market, which have grown in part due to a crippling port lockout on the U.S. west coast. The lockout, which has virtually ground to a halt vital trans-Pacific shipping lanes as it stretches into a second week, comes as sentiment on Wall Street is already strained by worries over a U.S.-led war in Iraq. "Sentiment is really shot right now," said Koichi Seki, equity manager at Chuo Securities. "Investors are scared of the impact of rising bankruptcies. And on top of that, worries of a war in Iraq and a slowdown in the U.S. economy are really weighing." Toyota, Japan's top automaker, was down 2.27 percent at 3,010 yen, and electronics giant Hitachi Ltd (Tokyo:6501.T - News) tumbled 5.52 percent to 531 yen. Last week's appointment of reform-minded Heizo Takenaka as Japa's top banking regulator jolted investors with the prospect that the government would finally get tough on cleaning up bad loans at Japan's major banks. The banks have an estimated 52 trillion yen ($422.1 billion) of non-performing loans, amassed following the bursting of Japan's late 1980s asset bubble and the subsequent years of stagnation. If banks in turn tighten the screws on ailing borrowers, that could eat into lenders' capital as they set aside more provisions or write off non-performing loans, and trigger a wave of bankruptcies, increasing the deflationary pressures weighing on growth in the world's second-largest economy. BAD TIMING Analysts said the timing to step up the disposal of banks' bad loans could not have been worse, coming against the backdrop of a global stock market slump, and the absence of policy measures to ease the pain for either employees or employers heightened investor nerves. "The government is now saying we should jump off a cliff without a safety net or water below us to ease the shock," said Hiroaki Muto, general manager at Nissay Asset Management. Shares of Daiei fell 25.6 percent to 93 yen, its third sharp fall in four trading sessions and the biggest decline in percentage terms on the Tokyo bourse's main board. Daiei, in the mould of other companies deemed "too big to fail", received a $4 billion bailout from its main creditor banks in February to help with its interest-bearing debts, which stood at 2.14 trillion yen ($17.37 billion) around that time. Concerns about a growing number of corporate bankruptcies were further exacerbated at the weekend, when media reports quoted Takenaka as saying that size alone would not be able to sustain ailing companies. Takenaka was also quoted in a separate interview with Newsweek magazine, published on its Web site, as saying he did not believe major banks were too big to fail. Mizuho Holdings (Tokyo:8305.T - News), the world's biggest bank by assets, fell seven percent to 197,000 yen and UFJ Holdings (Tokyo:8307.T - News) plunged 9.63 percent to 197,000, adding to a 32 percent loss last week.