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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: HB who wrote (13204)	1/16/1998 6:01:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 18056

Howard, look it up in the dictionary, if it is not there now, it will be there few years hence. "Defaltion" default resulting mainly from asset deflation. The term was used first on the SI-Mohan thread early in 1998. The term was introduced to describe the special circumstances under which major financial institutions in Japan found themselves violating their minimum assets requirement and going into default. This was attributed to deflation of real estate assets which were earlier marked to market (rather than book) at irrational exuberant valuations. A wave a defaltion hit the Japanese finacial institutions later in 1998, when Tsuritomo Land Bank was unable to repay maturing loans, and upon conversion of the inflated real estate assets on Tsuritomo's books to hard cash, these assets fetched less than 10% of the value these assets were carried on the books. A wave of similar defaltion of major institutions was finally walled in by revaluing up all Koi's on other banks book to market. The LDP strongly considered the revaluation of Kimonos and Japanese Ceramics, but the high Koi values on the banks' books obviated that need. It was decided to keep the revaluation of Kimonos and Ceramics to a later date in the unlikely event that a Koi deflation induced defaltion were to occur. Mr. Koi Kimono-kama stated that such an eventuality is unlikely. Zeev