Is Japan in final meltdown even without y2k? : LUSENET : TimeBomb 2000 (Y2000) : One Thread

There's a report on the web early this morning (Monday) that the New York Times is carrying a front-page story reporting that Japan's top 19 banks are on the very lip of financial collapse. Supposedly their capital reserves are even smaller than they have admitted earlier. The Tokyo stock exchange dropped almost two percentage points in the first thirty minutes of trading this a.m. This might explain why Japan's banks were telling the world they could fix their y2k problems for pennies compared to US banks' megamillions -- they didn't have the cash to finance anything more. But it also begs the question: If they're this bad already, what can we expect in fifteen months?

-- J.D. Clark (, October 05, 1998


Several years ago, Japan went through a sort of mini-Y2K situation when their previous emperor died. In addition to the Gregorian calendar, Japan uses another calendar based on the current emperor's dynasty. Many of their computer applications convert from one to the other where necessary. Anyway, when they had to go through all their computer software to update their dynasty-based calendar (it was the first dynasty change during the computer age), most of them also fixed up their Gregorian calendar calculations to handle the rollover to 2000. So most Japanese businesses really do have less of a Y2K problem than the average US business.

I don't know what the overall Japanese Y2K awareness is, but there is factual basis to think their Y2K problems are less than ours.

-- No Spam Please (, October 05, 1998.

It ain't just Japan.

My morning commute gives me enough time to skim the front section and OP-ED page of the NY Times. Today is about:

"Japanese Tell U.S. That Their Banks Are In Big Trouble" "To Buy Some Time, Russia To Sell U.S. Some Time In Space" "A Changed World For The IMF" "How To Make The Financial Giants Behave" "Disappearing Rubles, Omnipresent Rust Belt"

(this is all global financial crisis stuff)

"Serb Pullback May Forestall NATO Attack" "In Balkans, Calls To Watch Milosevic"

(about the violent side of human nature, and what comes out when empires clash and/or crumble)

"With Lines Drawn, House Panel Nears Impeachment Vote" "The 'Process' Begins" (William Safire) "Private Conduct Is Linked To Public"

(about the Distractor-In-Chief and the fact that our elected officials and media giants are really only capable of dealing with superficialities)

This is just the front page and op-ed. These things are all inter- related. Look at the (spider) web as a whole, as opposed to each strand of it individually, and a clear picture emerges.

Our civilization, as it is currently configured, is in BIG trouble...

-- pshannon (, October 05, 1998.

This post is somewhere on Mr. Yourdon's site. Today, it is also on Gary North's site. If you consider the high degree of automation that drives Japan's manufacturing industries then you can imagine the high level of impact that this will have, worldwide, when those systems fail. In the U.S. auto industry alone there are tremendous imports of parts for both Jananese and U.S. model makers. Could it be possible that G.M., Ford and Chrysler could continue without the just in time delivery of parts for both production or replacement? Absolutely not. In realizing how fragile our interwoven industries and economies truly are it strikes me that y2k will be equal to a nuclear bomb and many, many large corporations and governments will simply not exist in the state the enjoy today. The post I intially spoke of follows.

Japan: Saving Face by Losing Time

I have lived and worked in Japan for 6 years (for one of the world's largest companies) as an engineer and global business consultant. As a 45 year old executive with a career built on rational problem solving, I am faced with an irrational situation that is almost too horrible to talk about. To understand the Japanese mindset and interpret the true nuance of the language and culture is somethings Americans are not good at.

1. 100% of all government surveys and corporate statements are for saving face and "image" only. This does not mean that they are lies in the Japanese image of lying. In the western image, they are false statements. In the Japanese image, they are hopes for the future. To discuss bad news is culturally equivalent to suicide. You can read the "whys" of this in the near future from other articles I'll be writing about the Japanese approach to y2k-only the Japanese would make a cartoon of a smiley face on a computer screen and call it y2k awareness. Suffice it to say that effort is being made by major utilities, telecommunications, international transportation and international banking to maintain the external image of Japan. The problem is that Japanese industrial and manufacturing strenght is based on automated production to minimize direct material costs. The major manufacturering executives are still in denial and assesments of automated systems have only started recently -- this year.

2. As electronic and industrial parts makers to the world, many Jpanese companies are falsely issuing "no problem" compliance satements to any customer who asks for component compliance information. I have personally witnessed a major industrial automation and control manufacturer give an international customer a "fully compliant" report on a 7 year old building automation system without ever testing the system. The Japanese phrase "mondai nai" or "no problem" is the traditional Japanese business style of answering any request from a customer. If problems happen later, it is considered an opportunity to build a better relationship with the customer by solving the problem together. However, you must never let the customer worry before the problem happens...I know you think I am kidding, but I am deadly serious. So, the resulting problems for global manufacturers using Japanese electronic parts, components, and relying on JIT (Just in Time) delivery are going to be in for a global shock when the Japanese manufacturers are unable to deliver just in time because of the breakdown of their own networks of vendors who have also failed to remediate their automated production lines. The volume of PCBs (Printed Curcuit Boards) delivered to American companies by Japanese vendors is enormous. These cannot be manufactured by hand. They will not be delivered on time and it only takes a few days without parts to stop a complete industry. . . .

Remember, the current Minister of Finance has stated that the first priority to improve the Japanese economy is to begin clearing the massive debt. He said the same thing when he was Prime Minister in 1993. Things move very slowly here when action is required, but many Japanese companies will not make it to the year 2000 because the global market forces at work now will force the Japanese economy to implode before then.

The lack of understanding of the importance of the Japanese economy to

-- anonymous (, October 05, 1998.

After making the post above I realized that one might assume I wrote the entire message. This is not the case. I utilized the functions of copy and paste and I am only responsible for the first paragraph. The remaining majority of the post above is from some other author and I in no way take credit for it's content. I do, however, find horror in the meaning it conveys

-- anonymous (, October 05, 1998.

To "No Spam", "anon", (and the copied writer, etc.)

Thank you for the new info. We appreciate it.

-- Robert A. Cook, P.E. (Kennesaw, GA) (, October 05, 1998.

The first two messages in this thread are missing words at the end. This also happens to messages I send in if I am using Internet Explorer, but not when I use Netscape Navigator. I seem to lose one character for about each line of the message I type. Does anyone know why that error occurs? I overcome it by adding a string of extra symbols at the end, which isn't the ideal solution. <<<<<>>>>>

-- Dan Hunt (, October 05, 1998.

Let me clarify that where I earlier wrote "most Japanese businesses really do have less of a Y2K problem than the average US business" and "there is factual basis to think their Y2K problems are less than ours", I did not mean that Japan is necessarily ahead of the US in _solving_ their Y2K problems, or will necessarily suffer less Y2K disruption, just because of that.

If a Japanese bank has a medium Y2K problem rather than a large one, but makes little progress on it because it's directing all efforts to other areas (e.g., legitimately, staying solvent!), it's going to suffer greater Y2K disruption than a US bank with an initially larger Y2K problem that devotes (or is _able_ to devote) enough effort to effectively fix the latter's deficiencies.

-- No Spam Please (, October 05, 1998.

I have heard many similar stories about Japanese business, and can't comment on the truth or falsehood of them except to say that if Japan takes another hit next year it could be the end for them. They were never going to be the 'kings of Southern Asia' Newsweek and others were spouting about 10 or 15 years ago, no one in that part of the world trusts them not to revert to the old imperial ways. Not long ago, when I returned to college after a hiatus of many years, I had to take a class in mass communication. During this class we had to get up a discussion of some serious nature in a formal manner. My group chose 'Development of a Rational Foreign Policy for the United States'. This required discussion of former foreign policies, and some of their consequences. During the discussion, I mentioned Col. Clair Lee Chennault of Virginia, as the man who organized the Chinese Air Force during the Japanese aggression of 1914. I stated that the Chinese had never forgotten the fall of Nanking, which they called the 'Rape of Nanking' because the Japanese had raped or killed almost every human in the city. A Malaysian student (of recent Chinese descent) in my group then stood up, dark eyes flashing, and stated 'We never will forget!!!'. This was almost the only really emotional statement I ever heard her make. The others all involved family. The Japanese will not be the leaders of the Pacific Rim before 2050, if then. They have a lot of history to live down. This will make it harder for them to recover if they have a real melt down, not just a short recession.

-- Paul Davis (, October 05, 1998.

The Japanese are not well loved in the region, as Paul states. Ask a 60 something Korean woman how they feel about the Japanese. Ditto for the Filipinos, or anyone who made it through the Bataan march, or anyone who survived internment in a Japanese prisoner of war camp. I think a lot of people over there cannot wait to see Japan fall.

-- Uncle Deedah (, October 05, 1998.

My dad had the "Pleasure" of doing rehab on about 30 or 40 of the Bataan survivors for Uncle Sam at Rhodes Hospital, during the later stages of the war. He told numerous stories of the rehab difficulties, both physical and psych. Not a prety picture. And, he didn't talk about them much!


-- Chuck a Night Driver (, October 06, 1998.

I think that we should repay Japan for that little Pearl Harbor incident. Simply treating their imports here (from Japan to US) as they treat ours would wipe them out. My understanding is that they have a very high tariff on incoming goods and that they strategically drag their feet on approving shipments to injure organizations importing to their countries (seems as if I saw this on a 20/20 type of piece where imported fruits/veggies rotted in the Tokyo harbor awaiting approval). They deserve a sharp national caning from many different nations and look as if they may get it from a lack of aid from their nieghbors/allies during their time of turmoil. To me they are the world's annoying little Chihuahua biting heels that need a good kicking.

-- Slick (, October 06, 1998.

I read that in 1991 Japan's short-term interest rates were about 7.5% and now they are .25%. I don't think that's a meltdown...just a puddle. Sure hope their problem doesn't come over here like the Hong Kong Flu.

Good Health to everyone.


-- Larry Olney (, October 08, 1998.

Why not? They've exported everything else.....

-- Robert A. Cook, P.E. (Kennesaw, GA) (, October 08, 1998.

Everything else is next! Just think how cheap your next computer will be. I need to upgrade my hardware for the coming tax season and I'm holding off until I see this massive wave of hardware, software, cars, boats, planes, etc. coming at us.

Look Out...It's going to be a GLUT.

-- Larry Olney (, October 08, 1998.

Yes, and a glut causes US prices to drop to compete, which equals layoffs!

-- Gayla Dunbar (, October 09, 1998.

We just got a flyer from a local car dealer. They are advertising $7,000 of the list price, a $1,000 rebate with 1% financing. I think there are going to be some outstanding automobile deals come January.

-- Dave (, October 09, 1998.

Watch those cheap computers. A recent article (PCweek?) talked about how sub-$1000 PCs; about 14% of them have warranty problems. Also, if there's a bunch of non-compiliant BIOS chips laying around, don't you think they'll go in the cheap systems?

The $7000 off list for a car... interesting. Was the car perhaps a demo, or did it come from a lot in Mobile, AL last week & they're just forgetting to mention that? If the deal is for real, that tells you what kind of margin they've been getting.

-- Larry Kollar (, October 09, 1998.

The $7000 off the list price of automobiles was for new Chrysler mini-vans. And yes, cars are a rip-off!

-- dave (, October 09, 1998.

I suggest you go in and try to get that $7000 off deal. Bet you don't, or you will at least find out about some fine print. There might be a rebate from the mfr. on that car, go to Barnes and Noble and check in the back of Automotive News to see what the mfr. rebates are. How do I know this?

I will now admit to a stint as a car salesman, did it for about a year and a half. (don't shoot, I'm coming out with my hands up) Unless that minivan has a list price of $40,000 the markup isn't there. $7000 markups are very, very rare. Only big ticket items like Lincoln Town Cars, loaded up Expeditions, and the cream of the auto crop get anywhere close to that kind of a profit. Honestly!

Trust me, I have YOUR best interest at heart, and imagine the envious looks you will get from your nieghbors, when you pull up in THAT!

-- Uncle Deedah (, October 09, 1998.


I see after re-reading it is 7000 plus a 1000 rebate. My doubts increase. I know that the new car market has been saturated, and the mfrs. are desperate for deals, but I still cannot figure where the 7k is coming from.

-- Uncle Deedah (, October 09, 1998.

Deedah, the extra $7000 probably includes those dealer "packs" that they like to slap on... $1200 for "upholstery protection" (aka spraying Scotchgard on the seats), "rustproofing" (same thing as the local aftermarket undercoater, just 5x more), "ADM," "ADP," and all those other things that translate to more money for no benefit.

So there's 7 grand for about $100 worth of add-ons, and presto! they give it back!

Nope, never sold cars, just read Consumer Reports a lot.

-- Larry Kollar (, October 12, 1998.


You got it, thanks for the memory refresh.

-- Uncle Deedah (, October 12, 1998.

I would assume one could not have a trade-in vehicle with an offer like this. Any car dealership I've ever dealt with will always knock off several thousand without a trade-in. One way or another, the customer always ends up grabbing his ankles.

-- Dave (, October 12, 1998.

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