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To: Joan Osland Graffius who wrote (9076)	11/23/1997 11:58:00 AM
From: Elllk	Respond to of 18056

Joan As Bonnie indicated the problem is it could be a lot more than $190 billion. It is likely that the practices of Yamaichi and Hokkaido were not that unique, as well as their deceptions about the practices, and a lot more is to come. As previously noted, a billion here, a billion there---it adds up. Larry

To: Joan Osland Graffius who wrote (9076)	11/23/1997 12:03:00 PM
From: Bonnie Bear	Read Replies (1) \| Respond to of 18056

Joan: $190B is large.

To: Joan Osland Graffius who wrote (9076)	11/23/1997 2:13:00 PM
From: Rational	Respond to of 18056

Joan: What is critical here is not the cost of this failure, per se, but the Japanese policy for such failures. If BOJ does not extend help to Yamaichi, there will likely be a free fall in prices of financial companies. If BOJ extends help, there will be a uproar by taxpayers, weakening of Japanese economy because public funds will be expected to be used for the lapses by the Japanese financial companies. Either way, the stock market will face the turmoil. I forsee a steep fall in Japanese stock prices because the problems are looming. Yamaichi's fall after a lot of steadfast denials about their problems is a symptom of the cancer in the Japanese financial system that analysts were guessing so far but have now diagnosed for sure. It is likely that the Nikkei 255 will drop to its 15,000 level soon. The authorities as well as Yamaichi officials knew that this would be the problem and so they tried to go through a different route: * of announcing infusion of public funds, * artificially lifting up the stock prices (with some of the banks buying their own stock), and * then hoping to alleviate the problem by tricking investors. IMHO, all these tricks have failed and the true new equilibrium in the Japanese market will be reached soon. In short, Yamaichi, per se, would be a small problem if this were the only one. But, this is simply a pimple for the cancer that has already spread within the Japanese financial system. Sankar