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To: PaulM who wrote (7160)	2/3/1998 12:03:00 AM
From: Abner Hosmer	Read Replies (1) \| Respond to of 116764

Unbelievable. We've seen a series of ridiculous measures such as this for years. The system is unbelievably stagnant and corrupt. What will be the price of reform in Japan? I think the govt is trying to prepare the people for the necessity of bailing out the banks, but they still can't bring themselves to disclose publicly the full extent of the problem. Maybe they couldn't if they wanted to. Disclosure stinks, there is still a lot of rot under the covers.

To: PaulM who wrote (7160)	2/3/1998 12:23:00 AM
From: Abner Hosmer	Respond to of 116764

Now is not the time to be choosy.A chat with Richard Koo "To fix Asia, fix Japan first" forbes.com >>...In a weak economy and with the stock market down 58%, the Japanese government last year stupidly raised taxes. The last straw was the collapse of East Asian currencies. With capital insufficient to support their assets, Japanese banks have almost stopped lending at home. Koo calls it a credit crunch. ...Koo: Most people don't know how bad it is, but my guess is in the next few months they'll feel the pain. [There will be] bankruptcies. Some won't be insolvent companies but companies that simply can't roll over debts...We're already close to a financial panic. Did you say panic?? Many depositors are pulling money out of major banks and putting it under mattresses. In the interbank market the Bank of Japan repeatedly has had to supply funds to keep afloat institutions with deficits. If that's not a financial crisis, what is it?.. ...Preferred shares are the only solution. The argument is based on the Reconstruction Finance Corp. model of the 1930s. Then, U.S. banks issued preferred shares and the government bought them. Ten or so years later, when the economy had recovered and banks had regained their health, the transactions were reversed. Why not let the weak banks fail? The credit crunch is killing good companies right and left...<<