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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: bart13 who wrote (75626)	12/14/2006 11:54:26 AM
From: GST	Read Replies (1) \| Respond to of 110194

Japanese banks played a game that was 100% a creature of the Japanese business structure based on interlocking share ownership and cross financing of corporate expansion backed by real estate. The issue in Japan was never one of bad debts from consumers -- they were not even in the equation. It was about loans to business that held together the complex web of cross holding of shares of companies. The dominant tendency in Japan was to keep the export oriented economy going. Calling the loans would have sent ripples through big exporting companies that were culturally not going to be tolerated. Add to the mix the tight links between politics and the money they received from corporate sponsors, and a big pinch of organized crime -- do you want to be the guy to call a loan on a mob boss? -- and you get a system frozen in its tracks. The carry trade was their way to slowly -- ever so slowly, walk away for the train wreck. In almost every way possible, Japan was in the exact opposite position of the USA today, and in almost every respect their reaction as opposite how we react to such things. Comparisons to Japan on this thread have been -- sorry to say -- a farce.