Milne: Japan's Banks: White Wheat or Raisin? (with help from PNG)

greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread

Subject:Re: Japan Banks Compliant -- BOJ
Date:1999/06/12
Author:Paul Milne <fedinfo@halifax.com>
  Posting History Post Reply


Steve Dover wrote in message <37616717.A4E44544@strata-group.Xcom>...
>Henry Ahlgrim wrote:
>>
>[snip good news from BOJ]
>>
>> I'm banking on it.
>>
>> Doomies, kindly look somewhere other than Japan for global economic
>> collapse.
>>
 
 
Hey, Allgrim, read the following from Peter Gauthier.  If course, Japan is the picture of economic health to morons like you who are oblivious to the real world.
 
 
Peter Gauthier
 
 
 
New... (June 12, 1999 10:00 AM JST)
 
Tokyo Sowa Bank Goes Under
 
Tokyo Sowa Bank applied to the Financial Reconstruction Commission for protection from its creditors last night, saying it may not be able to pay back depositors.
 
The bank will likely be declared insolvent today (Saturday). The third regional bank to go under this year. Scoll down to see item posted yesterday.
 
 
 
"Prosecutors get blame for suspects' suicides"
 
Some snips from Masayasu Oishi of the "Mainichi Shimbun:"
 
"Company executives and bureaucrats are dropping like flies as they commit suicide when faced with bribery charges or other allegations."
 
"...prosecutors are largely to blame for pushing suspects over the edge in extremely intense interrogations.
 
'Whenever prosecutors investigate a bribery case, someone ends up committing suicide. This has been going on for years,' says Professor Akira Fukushima, a specialist on crime psychology at Sophia University."
 
"...First of all, they feel a duty to protect the organization to which they belong.
 
In other words, those being questioned in an investigation will commit suicide as a way of protecting higher-ups from being dragged through the mud; hoping that the investigation stops with them.
 
'This mode of thinking is particularly common among section chief aides and section heads, who will take their own lives to save their boss from shame. This is an extreme result of the nature of Japanese organizations,' says Fukushima.
 
The second reason people are driven to suicide, Fukushima says, is that they perceive white-collar crimes, such as breach-of-trust and questionable accounting practices, to be innocuous offenses, he says.
 
'They perceive themselves acting in the best interest of the organization to which they belong, in committing a crime,' says Fukushima."
 
 
 
 
The "Mainichi Shimbun" also reports a record number of suicides for 1998 - over 30,000.
 
 
 
June 11, 1999
 
Major Hedge Funds Focusing On Tokyo
 
Former British Prime Minister Margaret Thatcher and former U.S. senator and presidential candidate Bob Dole will visit Japan to attend a conference to be held by Tiger Management L.L.C., a major hedge fund, in Tokyo late June.
 
"Tokyo has become the most attractive place in the world for devising long-term investment strategies," said Robert Evans, the British Embassy's financial advisor.
 
U.S.-based funds, which have lain low since the Russian crisis of last August, have quietly begun to move. The task facing analysts visiting Japan is to read the course of its economic revitalization faster than others.
 
 
 
1.9% real GDP Reported for Jan - Mar Quarter. But...
 
The press has finally beaten the government bureaucrats into sumbission. They must be tired of looking like fools as they proclaim every month of every year that the 'economy is bottoming out' and 'things will turn around soon.'
 
After years of this nonsensical happy talk, based only on wishful thinking, government ministers lined up one after another today to express their concern that the 1.9% growth in GDP reported yesterday for the January-March quarter does not accuratley reflect the state of the economy.
 
The unemployment situation will continue to cause problems as companies attempt to purge their bloated masses of unproductive, high cost, middle-aged managers.
 
Economic Planning Agency Chief Taichi Sakaiya stressed that the agency is not optimistic over the economic outlook. "(The agency) still believes that the economy has just stopped its decline and is moving flat."
 
Crafty, old Finance Minister Kiichi Miyazawa had the best comment. He said the recent optimism is like seeing a light at the end of a tunnel...but nobody knows how long the tunnel is.
 
 
 
Another Bank on the Brink...
 
Tokyo Sowa Bank Debts Exceed Assets By 102.23 BillionYen
 
Tokyo Sowa Bank Ltd. today revised its earnings results for FY1998 just weeks after the Financial Supervisory Agency ordered the bank to improve it's capital ratio.
 
The Tokyo regional bank had debts exceeding assets by 102.23 billion yen. It had said in late May that it's net assets came to 40.27 billion yen.
 
Tokyo Sowa said its capital-adequacy ratio at the end of March came to minus 5.60% as a result of the capital deficit. It had said before that the ratio stood at 2.42%. Domestic banks are supposed to maintain a 4% capital ratio.
 
Tokyo Sowa also revised its group net loss to 194.28 billion yen. It said just a few weeks ago that its group net loss was 66.57 billion yen. (My 50% Rule is holding true...)
 
The arrests of former officers of the failed Long-Term Credit Bank yesterday on crimminal warrants may have had an influence on the bank to 'come clean.' Japanese financial crimminals usually just tearfully resign (with massive retirement bonuses), then are quietly rehired as 'advisors' by the same firm.
 
 
 
And Yet Another Bank...
 
Niigata Chuo Bank Revises Capital Ratio Down To 2.01%
 
Niigata Chuo Bank, a second-tier regional bank, has lowered its net worth ratio to 2.01% for FY1998, the bank announced today.
 
The minimum-required ratio for a bank with domestic-only operations is 4%. The Financial Supervisory Agency has issued the bank a stern piece of paper asking them to please try to do better.
 
Todays ratio is 3.21% lower than the bank's self-assessment figure released before the FSA began inspecteing the bank.
 
The bank also revised it's pretax loss to 54.22 billion yen, 30.05 billion yen more than previously reported. (My 50% Rule is holding true...)
 
Niigata Chuo has devised a clever scheme to improve it's capital base. First, it will ask its 6,700 corporate customers to lend it 10 billion yen, then slash lending to it's customers by 10 billion yen.
 
 
 
Bad Loans At 8 Life Insurers Reach 1.11 Trlllion Yen In FY1998
 
Japan's seven major life insurers and Chiyoda Mutual Life Insurance Co. saw their combined bad loans reach 1.11 trillion yen at the end of March 1999.
 
Nippon Life Insurance Co. reported the largest single amount of bad loans at 320.5 billion yen worth. Nonperforming loans topped 100 billion yen at each of Dai-ichi Mutual Life Insurance Co., Asahi Mutual Life Insurance Co., Sumitomo Life Insurance Co., Mitsui Mutual Life Insurance Co. and Chiyoda Mutual Life Insurance Co.
 
 
 
Midsize Life Insurers Write Off 160 Billion Yen Of Bad Loans
 
Seven midsize life insurers disposed of a combined 159.4 billion yen worth of bad loans in fiscal 1998, an increase of 43% from a year earlier.
 
Nonperforming loans totaled 345 billion yen.
 
The bad loan figures are based on self-assessments and will undoubtedly rise after the Financial Supervisory Agency finishes inspectiing the companies. (Remember My 50% Rule...)
 
A rise in corporate failures and a fall in land prices will deteriorate the value of collateral, forcing insurers to dispose of more bad loans.
 
 
 
 
 
 
 
>> **  White, wheat, or raisin?  **



-- a (a@a.a), June 14, 1999

Moderation questions? read the FAQ