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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: MikeM54321 who wrote (3854)	5/25/1998 11:37:00 AM
From: HH	Respond to of 9980

I love the triple-inverted world of currencies. I just wish that I comprehended all the implications. Hell, I'd settle for Rubin comprehending the implications.-g- HH

To: MikeM54321 who wrote (3854)	5/25/1998 4:11:00 PM
From: Worswick	Respond to of 9980

Mike: As a long time owner of things in Japan itself I was interested by your post. My own opinion is that by year end we will see the yen at between 160 and 180, my new idea here as the situations slipsdown hill. You will see as well, when Japanese imports top $15 billion a month in the trade deficit,and Japanese government people telling the Toyotas nd the Hondas that they have to go back to quotas for Japneses car imports here. Don't sell your Toyota. It will be worth 20% more next year here in teh US. At that, this summer as the world melts: the pound is sinking along with the yean at the momemt, we will see the world flock to America the safe haven. Our market will rocket upward. It will start to suck in yen, Hong Kong Dollar, and ringitt from the moon. Then, a sharp break in September.. headed for the glorious fall days of October when the leaves change...the market heads higher and we all jiin hand and leap into the new millenium together. Off the cliffs? With best wishes - Enjoy your posts.

To: MikeM54321 who wrote (3854)	5/25/1998 11:37:00 PM
From: MikeM54321	Respond to of 9980

Here is some up-to-date information on Japan's debt problems. This is a direct result of the "big bang" rules that Japan has elected to follow. They are heading towards Western style solutions. Even though it's pretty negative, I see it as Japan coming to grips with their problems. It's a first step in the right direction (IMHO). MikeM(From Florida) >>Japanese Banks Post Huge Losses New York Times TOKYO -- Six of Japan's biggest banks reported their largest annual losses ever Friday, a result of an effort to write off unrepaid loans and put the worst of a mountainous burden of bad debt behind them. Economic fragility at home and the financial crisis in Indonesia and the rest of Asia pose a double threat that could severely impair their ability to grant new loans for at least the near future. ''It's likely that this year will go down in history as the biggest ever,'' said Elizabeth Daniels, banking analyst at Morgan Stanley Dean Witter, referring to the amount of reserve money the banks are putting aside as a cushion for unrecoverable loans. ''But it is also likely that the banks will have to continue to take reserves over the next few years.'' ''They don't have much more capital to eat through,'' she said. Japanese banks have been struggling for years with what now amounts to at least $600 billion in bad debt, and several years' worth of loan write-offs have eroded their already weak capital bases. Many banks are writing off even larger chunks of bad debt in the fiscal year that ended March 31, 1998. The threats of more corporate bankruptcies and persistent economic difficulties at home are also thwarting their prospects, though the banks predicted profits for the current fiscal year. Profits from lending, bond trading and other core businesses collectively slid last year at four of the banks. Stock values at banks have plummeted and their funding costs are rising as foreign banks become more wary and charge more for lending to Japanese banks. This year, a pivotal issue will be the severity of Asia's economic difficulties. Japanese banks have the largest exposure to Asia of any country -- more than six times the exposure at American banks. Japanese banks have $22 billion in loans to Indonesia, the largest exposure of any country. Though the banks are setting aside reserves in expectation that some loans will not be repaid, many analysts say the amounts are insufficient. ''The problem is that they never got over their domestic loan exposure and were slow to recognize credit costs,'' said Thomas Keller, managing director at Moody's Investors Service. ''At the same time, they made a big bet on Asia in the hopes of generating strong earnings. It didn't work out and now they are forced to take reserves against that exposure as well. They are hit on both fronts.'' The large Japanese banks must meet international standards for capital adequacy set by the Bank for International Settlements. With a weak capital base, Japanese banks must grant fewer loans both in Japan and overseas. But by granting fewer loans, the banks have contributed to credit squeezes at home and elsewhere in Asia. Even as Japanese banks write off more bad debt in the most recent fiscal year, the amount is expected to soar once again, up to 60 percent more in some cases, partly because of stricter disclosure rules. In reporting bad debt, some banks are now adopting the definition of bad debt used in America -- loans with repayments 90 days delinquent. This means many loans previously considered viable under Japanese definition no longer are. Thus, Bank of Tokyo-Mitsubishi, for instance, said it was carrying bad loans of $16.7 billion, up 60 percent from the amount calculated the old way.<<