Tuesday, Feb 12, 2008
Japan is the next sub-prime flashpoint
gata: Just as battered investors had begun to glimpse signs of recovery in America, the next shoe has dropped with an almighty thud in Japan. Echoes are rumbling across the Far East.
The Tokyo bourse has crumbled, suffering the worst start to the year since the Second World War. The Nikkei index is down 17 per cent since Christmas, and the shares of Japanese banks are leading the slide. Mizuho Financial, Mitsubishi UFJ and Sumitomo Mitsui have all been punished as hard or even harder than those US banks at the epicentre of the sub-prime debacle.
Posted by chris @ 08:55 PM (342 views) Add Comment
2 Comments
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1. japanese uncle said...
In Tokyo these allegations are largely believed to be unfounded rumors released by the hedge funds who are shorting the financial stocks in Tokyo market. Let’s see what happens. The truth will come out sooner rather than later.
Personal I think this could hardly be true.
2. drewster said...
There is a clear distinction to be made between those who originated these loans (mostly American lenders and Northern Crock) and those who bought them (Wall Street banks, US pension funds, German banks, Norwegian pension funds, now Japanese banks). The latter group decided to stop investing in their own economies and to start investing in other markets, which is always more risky. As the credit crunch hits, the savers/investors are the ones who lose out. The borrowers fare quite well by comparison. This means the US could recover fairly quickly, only suffering a short, sharp, v-shaped recession. The fate of the lenders remains unclear.