Japan’s Premier Aso says U.S. must expand bailout plan
Well I hope we listen to the Japanese. We are not having a liquidity problem. We are having a serious debt and confidence problem that is creating the symptoms of a credit crisis. What the give away sign is that the credit problem is actually so acute and it actually slowing business. When you are dependent on credit, that lack of credit is much more noticeable and effective on your lifestyle. That changes a person perspective and that changes their purchasing behavior. In closing, when you bail everyone out then you bail no one out.
News Piece:
Japan’s Prime Minister Taro Aso said the U.S. government must accelerate steps to bail out financial institutions to help arrest plunging stock values.
“People think the $250 billion plan is insufficient and that’s why markets are falling,” Aso, 68, told lawmakers today in a reference to the U.S. initiative to buy stakes in thousands of financial firms. “They need to make a quick decision to inject capital.”
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Yen posts biggest advance in decade as carry-trade evaporates
The yen rose against the euro and posted its biggest weekly gain in a decade against the dollar as a global stock rout prompted investors to sell higher-yielding assets and pay back low-cost loans in Japan.
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Yamato Life in Japan Files for Bankruptcy, Citing Bad Investments
Well this is not a U.S. crisis or a OECD crisis but a global crisis. We will see more failures in all markets as this global de-leveraging is taking place. The other option is we could see world governments doing more to intervene in the markets and prop up these insolvent institutions and in turn that would make the problem more acute. It would be more acute because the more you change the rules during the game the more people will not want to participate and will just withdraw there assets into cash and wait on the sidelines till they know there is more certainty.
News Release:
Yamato Life Insurance Co., a 98- year-old Japanese insurer, filed for court protection from creditors in the nation’s first bankruptcy in the industry in seven years, with debts exceeding assets by 11.5 billion yen ($116 million).
A decline in the value of securities holdings widened losses at the Tokyo-based company, whose debts total 269.5 billion yen, as value of its investments widened amid the global market meltdown, Yamato Life said at a press briefing in Tokyo.
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Japan’s economy shrinks in second quarter, recession on the horizon
Japan’s economy shrank in the second quarter, the government said Wednesday, as slowing exports and waning consumer demand pushed the world’s No. 2 economy to the brink of recession.
Japan’s gross domestic product, or the total value of the nation’s goods and services, dropped at an annual pace of 2.4 percent in the April-June period, a marked downturn from a 4.0 percent rise registered in the January-March period.
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