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To: limtex who wrote (11574)	6/17/1998 8:12:00 AM
From: Ramsey Su	Read Replies (1) \| Respond to of 152472

limtex and all, the following is the type of crap that makes gauging the Asian impact impossible. What is ultimately the figure for this bad loan problem, currently tagged at around $500 billion. I remember when the Japanese was buying everything in Hawaii in the 80s, there was a guy they called Mr. Rolls Royce. He drove a Rolls around Hawaii and simply made offers/bought every property he liked. Also remember a hotel deal that we were analyzing and puzzled about. The details escape me now but I do remember that in order to be cash flow positive, they would have to charge $500 average per room night and have 100% occupancy. How many properties like this are in their books? In the mean time, it appears that someone is "playing" with the yen. Be it BOJ or Soros, this type of desperate or opportunistic moves usually preceed some major news. I am upset only because they did not call and tell me what they are doing so that I can ride their coattails. Finally, with all the earning warnings, the market is going back up. With our luck, if QCOM sneezes, it will go down again. Ramsey TOKYO (Nikkei)-Amid a decline in Japanese land prices, real estate collateral covered a mere 21% of the value of nonperforming loans disclosed by Japan's 19 major banks as of last September, according to data compiled by the Federation of Bankers Associations of Japan. The industry group maintains that banks are taking adequate loan-loss provisions to cover estimated losses in their loan portfolios. But the property-collateral figures underscore concerns that loan-loss reserves could fall short of actual losses. Taking advantage of Japan's looser accounting standards, the 19 banks disclosed roughly 17.89 trillion yen in bad loans as of the end of September 1997. Of that total, 32% was secured by collateral, with property collateral covering 21%. That left the banks exposed to losses on 68% of the disclosed nonperforming loans that they should have accounted for by taking loan-loss provisions. But according to the industry group, the banks' reserve-coverage ratio - loan-loss reserves as a percentage of nonperforming loans - stood at 63.9% as of March 31, when the banks started to disclose sour loans under stricter, U.S. accounting standards. That overall reserve-coverage ratio may not offer adequate protection. Industry analysts project that a growing wave of corporate failures will spawn new bad loans, even as falling land values erode the security provided by property collateral. The banks, meanwhile, are seeing their financial strength sapped as bad-loan disposal reduces their capital, and a sliding stock market erodes their cushions of unrealized portfolio gains. TOKYO (Nikkei)-Bank of Japan Governor Masaru Hayami on Tuesday urged private financial institutions to accelerate efforts to disclose more specific information on the recoverability of their bad loans, criticizing their reluctance to make such data available to the public. It was the first time the BOJ has formally asked private lenders to publish such information. The BOJ governor said accelerated disclosure will help induce the institutions to speed up bad-loan disposal. He characterized more open disclosure as a pressing need if Japan hopes to spur its sluggish economy, saying it will help restore trust in the country's financial system. Hayami warned that Japanese banks have delayed disposing of bad loans and still carry large amounts of problem lending. Starting with their fiscal 1997 earnings reports, Japanese financial institutions are disclosing bad-loan data under standards set by the U.S. Securities and Exchange Commission. However, the four-tier system they use internally to classify their outstanding lending gives a broader picture of their bad-loan problems. (The Nihon Keizai Shimbun Wednesday morning edition)