From PNG's site http://www2.gol.com/users/png/ (italics mine):

The 50% Rule... Again

I've mentioned before the "50% Rule" of bad financial news in Japan. The government, companies and the press report only half of the magnitude of "new" financial problems in the first headlines. A few months later, a small, follow-up story with the "real truth" will show up on page 3. The amount of money lost, stolen or unable to be repaid is double the amount of the originally reported amount.

The first headlines usually get reported outside Japan. The "real truth" rarely gets picked by foreign journalists. The story is old news...it's only more money now.

Towa Real Estate had previously asked for "debt forgiveness" of about $1 billion from one bank and its largest shareholder.

"Will you please forgive me for not paying back the $1 billion I owe you?" Try this with American Express and see what they say.

Now, Towa Real Estate is asking for another $1 billion in "debt forgiveness" from 6 other banks. Another $1 billion? The 50% rule raises its ugly head...again.

Now, before you get caught up in semantics, the fact that this information is released to the newspapers means it's a done deal.

This is not a deferred payment plan. This is: "Remember that $2 billion you owe us? Well, you don't have to pay it back and we'll probably give you more cash on top of that because the government will give us the money to cover it."

My question is why are they asking the bank executives? Banks don't have any money. Towa Real Estate borrowed the depositors' money and promised to repay it with interest.

The government doesn't have any money to give to the banks to offset these bad loans. The taxpayers' money is being given to the banks to offset the depositors' money mishandled by the banks and Towa Real Estate.

Can anyone tell me the last time a western company asked for over $2 billion in "debt forgiveness?" Maybe it will be on page 3.

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When people begin to understand this, that banks and fund managers have irretrievably "sold" the retirement earnings they have accumulated over decades, that is when the y2k trouble will begin.

-- a (a@a.a), January 17, 1999

Answers

One more time, with some additional emphasis in bold (PNG's)

From PNG's site http://www2.gol.com/users/png/ (italics mine):

The 50% Rule... Again

I've mentioned before the "50% Rule" of bad financial news in Japan. The government, companies and the press report only half of the magnitude of "new" financial problems in the first headlines. A few months later, a small, follow-up story with the "real truth" will show up on page 3. The amount of money lost, stolen or unable to be repaid is double the amount of the originally reported amount.

The first headlines usually get reported outside Japan. The "real truth" rarely gets picked by foreign journalists. The story is old news...it's only more money now.

Towa Real Estate had previously asked for "debt forgiveness" of about $1 billion from one bank and its largest shareholder.

"Will you please forgive me for not paying back the $1 billion I owe you?" Try this with American Express and see what they say.

Now, Towa Real Estate is asking for another $1 billion in "debt forgiveness" from 6 other banks. Another $1 billion? The 50% rule raises its ugly head...again.

Now, before you get caught up in semantics, the fact that this information is released to the newspapers means it's a done deal.

This is not a deferred payment plan. This is: "Remember that $2 billion you owe us? Well, you don't have to pay it back and we'll probably give you more cash on top of that because the government will give us the money to cover it."

My question is why are they asking the bank executives? Banks don't have any money. Towa Real Estate borrowed the depositors' money and promised to repay it with interest.

The government doesn't have any money to give to the banks to offset these bad loans. The taxpayers' money is being given to the banks to offset the depositors' money mishandled by the banks and Towa Real Estate.

Can anyone tell me the last time a western company asked for over $2 billion in "debt forgiveness?" Maybe it will be on page 3.

=========

When people begin to understand this, that banks and fund managers have irretrievably "sold" the retirement earnings they have accumulated over decades, that is when the y2k trouble will begin.

-- a (a@a.a), January 17, 1999.

PNG and a@a.a: While it is true that they do not have any money, the do have securities. Up until 1997, they had to "value" these securities at current market value. Since the stock market went from 40,000 to 13,000, this meant that many banks were in reality, technically speaking, insolvent according to international banking requirements. So what did they do? They changed the law. Now, a Japanese bank can value their securities at either the current market value or what they paid for the security. Since they bought many of the securities at the height of the bubble, the prices were astronomical compared to todays valuations. Smoke and mirrors. So, I think this is at least partially the answer to why they bother asking the banks at all. They do not have the cash, nut they are carrying securities at greatly inflated valuations on their balance sheets.

-- Rob Michaels (sonofdust@net.com), January 17, 1999.

Nightline did a good piece on this about a month ago. Banks such as these are called "Zombies," because they are really dead but they continue functioning day to day as though everything is just fine and dandy. Scary than "Night of the Living Dead" if you ask me.

Jeannie

-- jhollander (hollander@ij.net), January 18, 1999.