> I don't think so. It's the big banks that are
the > scariest and the most likely to be gone in
a > couple years. After the Mizuho bank machine >
debacle, that's even more apparent. Too big to
be > managed.
Dennis replied:
>Mizuho is the collective savings-pool of
Hitachi, Fujitsu, the reborn Nissan,
>NKK-Kawasaki, Canon and a ton of other
ferociously competitive firms. The >moon would
have to crash into the Earth for Mizuho to go
bust.
If the yen goes back to an unsustainably high level, it might not take planetary collisions. I think that MofF thinks Mizuho is too big to fail, but so far the evidence on the ground is that it is too big to manage. One problem is that so far the holding companies set up to manage the different banks brought together in the mergers are powerless. Well, I don't necessarily think that is a problem, but obviously it makes the mergers more difficult from a managerial perspective.
The MofF and the FSA will insist that Mizuho meets the 8% capital adequacy ratio for global banks. This is where it could get tricky, but of course that all depends on who gets to define what is and what is not a bad loan. Again, if all the loans are so bad, why do so many different interests want to buy them? Because they know that under those piles of loans are companies with assets and with a work force that can still make things.
>The Nikkei is a screaming buy. Three words:
dividends, dividends, dividends.
It looks pretty good, and yes, they do pay dividends in Japan. But the profits have got to come back and stay back for that to be significant.
CJ:
> As the yen goes to 115 to the dollar, and
exports > become unprofitable, >and domestic
deflation > continues, it's more, more, more of
the same, > >same, same. Prediction: Japan will
be firmly back > in recession by Q4.
Dennis:
>Fear not. Asiazilla is back, and the
Eurobourgies are about to remove the >eyeteeth
of the US neolibs with a rusty pliers Duisenberg
found at a >swapmeet in downtown Geneva. Kind of
a hassle for global proletarians with >401K
plans, but hey, that's what money market funds
are for.
Korea is shaky (though liberalized--sold off-- enough to keep western financial and business interests happy for a couple years), Japan depends now on a yen staying below 125 (last time I looked it was pushing toward 115), and the US is moving toward ever more protectionism. One good thing is the ASEAN plus 3 have set up a system of currency swaps that will help foil the currency speculators the next time an economic/financial crisis strikes. If the Europeans put a stop to the US at the IMF and WTO, and if they put a stop to Bush's latest futurist venture--invade Iraq, then I'll believe you Dennis.
CJ
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