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Non-Tech : Derivatives: Darth Vader's Revenge -- Ignore unavailable to you. Want to Upgrade?

To: Peter Singleton who wrote (51)	9/8/1998 8:54:00 AM
From: Henry Volquardsen	Respond to of 2794

This is a pretty interesting issue. As I read the article this is not an issue of them losing money on bad investments but of underfunding pension assets. This was a problem in the US years back but most companies have either funded their pension plans or moved to defined benefit programs. Amyway a pension problem can lead complicate one of Japan's biggest weaknesses. Japan's population is aging rapidly, demographically it is one of the oldest in the world. And their birth rate remains low. Now this is a problem in other countries as well. But take the US, we remain open to immigrants so we get an influx at the younger end of the demographic which will still have a long working life. The homogenous nature of Japanese society makes it very unwelcoming to immigrants so they get no influx of younger workers. As the Japanese population continues to age the underfunding of pension assets will become a big problem. As far as how this impacts the long term outlook for Asia, I believe we will see Japan decline in importance. In the not to distant future I belkieve we will gradually see China emerge as the dominant economic force in the region.

To: Peter Singleton who wrote (51)	9/8/1998 12:18:00 PM
From: Worswick	Read Replies (1) \| Respond to of 2794

What a great article you dug up. These pension liabilities are in addition to the already broke US$9 trillion worth of existing Japanese pension funds.... that are now paying a guaranteed 4% to their plan members in an interest rate environment that generates no more than 1.5% in Japan. Let's see the spread here is 2.5% times $9 trillion. Gee. $222 billion a year... The stock holdings of these $9 trillion in asset pension funds are down at least 60% from the high of the Japanese market. ref yours: "Mr Tamura, who is one of only 300 actuaries in Japan compared with 2,100 in Australia, warned that the safety net for pension fund beneficiaries was "totally inadequate" and that there was no law which would protect the interests of beneficiaries". As I said Japan is broke. My best to you, Clark

To: Peter Singleton who wrote (51)	9/9/1998 11:08:00 AM
From: don pagach	Read Replies (1) \| Respond to of 2794

To all: There has been plenty of rumors about Fuji Bank's derivative losses although strongly denied by Fuji, does anyone know where this rumor started and any chance that Fuji may not be telling the truth in denying the rumor. Additionally, hate to ask for research but has anyone seen a list ranking Japanese Banks in terms of health? Any link would be appreciated. Fuji's denial is below: Fuji Bank says derivatives loss maximum Y15 bln TOKYO, Sept 9 (Reuters) - Fuji Bank said on Wednesday it saw a maximum possible loss from its derivatives trading of about 15 billion yen. The Japanese bank reiterated in a hastily called news conference that there was no truth in market rumours of it suffering derivatives losses. It said the risk was not high from its derivatives transactions, which were mostly interest rate swaps. Yutaka Komatsu, derivatives products general manager at Fuji Bank, said the maximum loss forecast was based on the bank's group-based outstanding derivatives contracts as of end-March. ''Our derivatives trading is controlled to have very small market risk,'' Komatsu told a news conference. Komatsu said the bank's notional amount of derivatives transactions totalled 418 trillion yen as of the end of March. This included both capital calculated according to the standard set by the Bank for International Settlements (BIS) and that not so calculated. The derivatives contracts outside the BIS standard include those in the interest futures market and foreign exchange contracts whose terms are shorter than 14 days.