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

To: MikeM54321 who wrote (5624)	8/18/1998 9:36:00 AM
From: Worswick	Read Replies (3) \| Respond to of 9980

Hey, Mike. Amazing you had this in front of you. Ref yours: "Worsick, Funny you should ask. I was gathering some details for a post I wanted to do later. It just so happens I have the figures in front of me. Here's what the articles say: Postal Savings System: $3 trillion Investment Trusts (personal?): $9 trillion I'll get to my post, concerning the above numbers, as soon as I have some time. MikeM(From Florida") Mike and thread. The other shoe to drop in Japan is this... ...whilst talking to a pension fund manager in London a month ago we got to talking about Japanese pension funds. He said that the contributing reasons for the Japanese crisis - aside from the banking crisis - were two fold. One, the postal savings people during the era of the socialists agreed to give above market rates of return to the savers in the scheme. How do you give above market rates for years on $3 trillion dollars and not have it hurt? Second, he asked me if I remembered the insurance companies in the US that sold GIC's (guaranteed investment contracts) during the 1980's? An insurance company would guarantee a rate of return to a policy holder for the life of the policy.Guess what? Rates went down. And so did venerable American insurance companies like Equitable. The GIC guaranteed 9%... you could only buy paper in the market that would pay 6%. Disaster time. Move forward (or sideways to Japan). During the 1980's the Japanese pension funds guaranteed 4% rates of return in perpetuity. They then invested the pension moneys heavily in the Japanese stock markets. In the late 80's and early 90's that money went to money heaven. At this very moment what is the rate of return in Japan now in the money markets? Yet, the Japanese pension funds still apparently pay 4% on their GIC contracts to their holders. Guess what? GIC's all over again. This is the world's greatest Ponzi scheme. The world prize. This is the other shoe that simly dwarfs the size four Japanese shoe of the banking crisis. This is why the Japaense can't admit the emperor has no clothes. Think about it. The pension funds are hugely, I mean hugely underwater. They have drowned. They are dead. Have you ever heard about this little problem? We are talking about vast amounts of money here that have gone to money heaven. This like Godzillsa that is going to munch Tokyo. Vast, vast amounts of money. It is simply gone and the whole pension system of Japan is/has evaporated. Whether this is true or not I don't know. I have heard this from a person who's life is spent in this world of pensions and Asian insurance. Stitch ref the vulture funds investing in Asia. We are talking no liquidity. None. If the above is true. Best to you all, Clark