Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Lucretius who wrote (68629)	10/1/1998 4:09:00 PM
From: D.J.Smyth	Read Replies (3) \| Respond to of 176387

ot 15:04 DJS Japanese Lawmakers Set To Pass Long-Awaited Banking Reforms 15:04 DJS Japanese Lawmakers Set To Pass Long-Awaited Banking Reforms TOKYO -(Dow Jones)- A set of long-awaited financial-reform bills is expected to pass Japan's lower house Friday, after Japan's ruling and opposition parties ironed out their last remaining differences by agreeing on a 10 trillion yen fund for placing weak banks under government control through share purchases. The bills, based on legislation previously proposed by opposition groups, are intended to rejuvenate Japan's crippled banking system and stimulate the world's second-largest economy, which is mired in its deepest recession since World War II. The four bills were jointly submitted to the Diet by the ruling Liberal Democratic Party and opposition parties. In a memorandum outlining the points of the pact, the LDP, main opposition Liberal Party and the parties included in the Heiwa Kaikaku (Peace and Reform) group also agreed to divest the powerful finance ministry of some of its policy-making authority over the financial system by 2000. The legislation also calls for the creation of a special committee to oversee the cleanup of the financial system, and requires failed financial institutions to be liquidated either by putting them under state control or by transforming them into bridge banks. That marked a significant concession by the LDP, which originally wanted to inject massive amounts of public money into weak institutions to keep them afloat. The parties agreed to abolish a 13 trillion yen pool earmarked by the LDP for recapitalizing weak banks. The bills do allow the injection of public funds into financial institutions that take over a failed company purchased by the state. The government will temporarily nationalize insolvent banks by using the new 10 trillion yen fund to purchase the banks' shares. The final agreement, coming after weeks of haggling that resulted in on-again, off-again accords, makes it virtually certain that key reform bills will be passed into law this month. The so-called financial-revitalization bills are expected to pass the lower house of parliament, the Diet, on Friday, with passage in the upper house to follow by a week or so. Politicians have vowed to extend the current session of parliament beyond its Oct. 7 deadline if necessary. Although the LDP lacks a majority in the upper house, its alignment with the two opposition groups in backing the financial-reform measures guarantees that the bills will eventually clear the upper house, despite expected resistance from the Japan Communist Party and the Liberal Party. The pact represents a major step toward resolving Japan's mountain of bad debt, which some estimate could total as much as $1 trillion. The pile of uncollectable loans has prevented banks from generating the fresh lending necessary for stimulating economic activity in Japan and troubled neighboring countries, generating fears of an even deeper crisis in Asia. Although the legislation scrapped the former scheme to use the 13 trillion yen pool to replenish the capital of troubled banks, it will provide a safety net to weak banks all the same. By allowing the government to purchase shares in troubled institutions using the 10 trillion yen fund, the plan will ensure to some extent the soft landing that many analysts say is necessary to keep the fragile financial system from crumbling. And by also allowing banks that take over the operations of a nationalized institution to receive capital infusions of public money if necessary, the bills create an incentive to throw a lifeline to financial institutions in need. However, the plan is still likely to result in more sudden bankruptcies among insolvent debtors of weak banks, following the example set by Japan Leasing Corp. last Sunday. That's because in theory, the process of temporarily nationalizing weak banks would force the institutions to settle accounts with their borrowers, clearing the system of bad assets. Questions remain, however, regarding what sort of criteria will be used to determine a bank's fate in some cases. The special committee established to oversee the financial-system cleanup will be empowered to take charge of a bank deemed to be facing imminent failure or having actually collapsed. But it's unclear what criteria the committee would use to determine that an institution is on the verge of collapse. Also, in the event of a failure, the committee would have the authority to decide if the bank should be put under temporary government control, turned into a publicly owned bridge bank or liquidated. But again, it's unclear what criteria would be used to decide which route to take. Under the bridge-bank concept, the government would take over weak banks, and separate good assets from bad while continuing to lend to clients deemed creditworthy. The bad debts will be split off and placed under control of the government collection agency, which will try to first collect on the loans, and then sell the uncollectable ones for whatever they will fetch. Regarding the thorny issue of divesting some of the Finance Ministry's authority over the financial system, Thursday night's agreement stipulates that the necessary steps for splitting off some of the ministry's power be decided by the end of the next regular session of parliament and be carried out by Jan. 1, 2000. The government will also merge two other debt collecting institutions to create a Japanese version of the U.S. Resolution Trust Corp. The plan stipulates that no former officials from the Ministry of Finance or Bank of Japan may act as executives for that institution until they've been retired for at least five years. The pact comes just in time for Finance Minister Kiichi Miyazawa to take with him when he travels to Washington to attend Saturday's meeting of Group of Seven financial authorities followed by an annual gathering at the International Monetary Fund from Sunday. Tokyo has been under increasing pressure from the international community to straighten out its financial system and get its economy back on track. Just as the LDP and opposition parties were announcing their agreement, IMF Managing Director Michel Camdessus was explaining to reporters in Washington that one of the "most important" factors that would help to ease the turmoil in financial markets is for Japan to put its financial house "in order." Camdessus also said, "There are ways to contain (the world crisis). One way is for the major players to discharge their responsibility to stimulate growth." On Wednesday, the IMF slashed its growth forecast for Japan's economy - the world's second largest - to minus 2.5% this year from a previous projection of flat growth. Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved. (:J.LTC) (:J.NOB) 10/01 3:04p CDT

To: Lucretius who wrote (68629)	10/1/1998 4:23:00 PM
From: JRI	Read Replies (2) \| Respond to of 176387

Luke: You are the one that is hopeless... Your odd choice (six months ago) of an investment mix of Dell leaps, XAU (-like investments), and long Japan have turned in a MISERABLE performance vs. Dell (past 6-9 months) You continue to present no hard evidence of any near-term decline in the future earnings growth of Dell...While Michael Dell increases his outlook on PC industry sales for the next 3 years....and other, independent organizations predict not only an upswing in PC sales during the next two quarters, and all of next year, but also Dell's continued dominance.......you continue to predict your brand of unsubstantiated doom and gloom.. Sorry to say, MD (and these others) have a little more credibility (than you) at this point...Try giving us some data for a change.... Doesn't mean we don't like having you around, though :)