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To: Sonki who wrote (66634)	9/22/1998 11:57:00 AM
From: Mohan Marette	Respond to of 176387

<-OT->The cost of bailing out Japanese Banks & News from Brazil So you think the real reason for CPQ's problem in Asia is DELL,well I wouldn't doubt it. ================================================= Source:Reuters via Fidelity. Japan:Worst Case Scenario -Banks to cost 20% of GDP INTERVIEW-Banks may cost Japan 20% GDP--Fitch IBCA TOKYO, Sept 22 (Reuters) - In a "worst case scenario" the Japanese government might need to spend as much as 20 percent of gross domestic product to support ailing banks, Fitch IBCA managing director David Marshall said on Tuesday. Marshall was explaining in an interview with Reuters Television why his rating agency made a decision, announced on Monday, to cut Japan's long-term foreign currency sovereign rating to AA plus from AAA. One of the two main issues in making the assessment was that of non-performing loans, Marshall said. He said that while banks had been reporting a modest level of non-performing loans, officially most big banks were saying they would make a profit in the current financial year. He said his agency had not accepted that. "The realisation that we are coming to is that the losses will not only be overwhelming for the weakest banks but that even the stronger banks are going to see losses on a scale that will cause their capital to become significantly depleted, so even the strongest banks are going to be undercaptalised and are going to need government help." He said he did not believe the actual figure needed to support the banks would reach as high as 20 percent of GDP unless the economy continued to slide. He said he wanted to see the government do something now. "Most worryingly, the government has been prevaricating during all this period. We really do need to see some decisive action." ================================== Japan:Leading Indicators TABLE-Japan July index of leading indicators at 50 TOKYO, Sept 22 (Reuters) - Japan's diffusion index of leading economic indicators stood at 50 on a scale of 100 in July, the Economic Planning Agency said on Tuesday. The index reached 50 after nine consecutive months lowerthan that level. The coincident index for July was 20, the 12th consecutive month below 50, it said. The EPA also said in a statement that although the leading index had risen to 50, the coincident index was still below 50, production related indicators were on a declining trend, consumption related indicators were stagnant and employment related indicators were still very severe. ======================================= Brazil-Forex outflow Brazil's forex markets lose $518 million on Monday SAO PAULO, Sept 22 (Reuters) - Brazil lost another $518 million through its foreign exchange markets on Monday, traders said, as moderate dollar outflows continue despite a huge hike in interest rates. Dollar flight slowed to just under $500 million a day last week after the government boosted interest rates to almost 50 percent. Capital flight came down from a daily average of about $1.5 billion the week before, but shows signs of continuing despite the interest rate hike, traders said. As of Monday, some $15.736 billion had left Brazil through its forex markets in September, draining reserves to below $50 billion. Reserves are considered the government's best defense against a speculative attack. On Monday, $349 million left the country through the commercial forex market, according to the Central Bank, and another $169 million left through the floating forex market. High interest rates and a new fixed-income security pegged to the floating exchange rate have helped slow outflows through the floating exchange rate, generally considered the exit for Brazilian investors. Monday's outflows through the floating forex market were the lowest registered since August 20.