"Global Anxiety Catches Up to Japan’s Economy"
"Global Anxiety Catches Up to Japan’s Economy," see http://www.nytimes.com/2008/10/11/business/worldbusiness/11yen.html. The Nikkei index is about a quarter of what it was 19 years ago, and, it crashed about -25% the past week, versus about -18% for the Dow 30/DJIA (the worst week in 1933 apparently was about -17% for the DJIA). Secular bears happen, so do depressions.
Part of the article is below.
"The world’s second-largest economy had seemed enviably immune from the global financial contagion, as its cash-rich banks held little of the subprime debt that contaminated the books of financial institutions in the United States and Europe. Now, there is a growing feeling of foreboding, even panic, seen in Friday’s stunning 9.6 percent drop by the benchmark Nikkei 225 stock average — just two days after the index fell 9.4 percent.
Japan is suddenly feeling a lot more vulnerable to the global turmoil, which in recent days has finally begun to show signs of damaging the nation’s $5 trillion economy. One of the biggest shocks came on Friday with the sudden bankruptcy of Yamato Life Insurance, a midsize insurer that became the first Japanese financial institution to fall victim to the global financial collapse.
On Friday, the sense of dread here was palpable on a Tokyo subway platform, where a small crowd of grim-faced salarymen gathered in stunned silence around a news kiosk to stare at afternoon newspaper headlines.
“Is that the Nikkei?” one finally asked in disbelief, nodding at one headline that gave the index’s morning closing price of about 8,200 — 25 percent below where it was just a week ago.
“I’m going to have to find a part-time job,” muttered another. “A new Great Depression is coming.”
There is fear here that the nation could soon become collateral damage in a financial crisis not of its own making, which seems to be unfolding with surrealistic speed.
Even the country’s financial industry, which just a week ago was patting itself on the back for escaping the crisis, no longer seems so safe. The collapse of Yamato Life, with $2.7 billion in debts largely from subprime-related investments, raised the specter of similar losses at other smaller financial companies, which have received less scrutiny than the nation’s big banks. "
.......http://www.JoeFRocks.com/
Part of the article is below.
"The world’s second-largest economy had seemed enviably immune from the global financial contagion, as its cash-rich banks held little of the subprime debt that contaminated the books of financial institutions in the United States and Europe. Now, there is a growing feeling of foreboding, even panic, seen in Friday’s stunning 9.6 percent drop by the benchmark Nikkei 225 stock average — just two days after the index fell 9.4 percent.
Japan is suddenly feeling a lot more vulnerable to the global turmoil, which in recent days has finally begun to show signs of damaging the nation’s $5 trillion economy. One of the biggest shocks came on Friday with the sudden bankruptcy of Yamato Life Insurance, a midsize insurer that became the first Japanese financial institution to fall victim to the global financial collapse.
On Friday, the sense of dread here was palpable on a Tokyo subway platform, where a small crowd of grim-faced salarymen gathered in stunned silence around a news kiosk to stare at afternoon newspaper headlines.
“Is that the Nikkei?” one finally asked in disbelief, nodding at one headline that gave the index’s morning closing price of about 8,200 — 25 percent below where it was just a week ago.
“I’m going to have to find a part-time job,” muttered another. “A new Great Depression is coming.”
There is fear here that the nation could soon become collateral damage in a financial crisis not of its own making, which seems to be unfolding with surrealistic speed.
Even the country’s financial industry, which just a week ago was patting itself on the back for escaping the crisis, no longer seems so safe. The collapse of Yamato Life, with $2.7 billion in debts largely from subprime-related investments, raised the specter of similar losses at other smaller financial companies, which have received less scrutiny than the nation’s big banks. "
.......http://www.JoeFRocks.com/
posted by Joe Ferrazzano at
10:48 AM
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