business

Japan's banks have $3 bil in Lehman debt

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Too small for Japanese Mega Banks to call it a debt.

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On Tuesday evening Lehman Japan filed for bankruptcy to gain protection from its creditors under the Civil Rehabilitation Law. Their are over 1300 people working at Lehman Japan, many of them contract employees, who will be out of a job. In fact all of the contracted employees were sent home Tuesday and asked not to return to work. With the economy in such a slow down, that it being 4th quarter for many institutions, and it is near the end of the calendar year it will be extremely difficult for these 1300 to find work. The impact of the Lehman failure will be felt across many fronts and we have only seen a small taste of what is to come.

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Please let us have a better description of the relationship with Lehman, other than "loans".Doubtless the association is substantially in default credit swaps or some such other "sophisticated" financial paper transaction and therefore less secured, and more risky, than a straight loan 'secured'. Let's hear from the banks directly and honestly.

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Ina doesn't know whether to be vague,evasive or unclear. He doesn't know, but is sure that he is positive that it might be that way.

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Major banks have “considerable protection” from collateral and hedging so

I like how they write “considerable protection” with quotation marks. Protection ala AIG?

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Moa maani please. And be ready to empty the coffers.

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And here’s the other side of the story.

On Wednesday 3 TRILLION yen was injected into the domestic money market by the Bank of Japan, bringing the total amount this week to 5.5 trillion yen. But then they were just following the same course of action as other central banks around the globe.

The truth is, Japan is still the world’s 2nd largest economy but it is in deep deep doggy do-dos. Only last week official figures showed that in the Japan’s economy in the 2nd quarter of this ear had shrunk by 3% (on the annualizes basis). In Tokyo, just as elsewhere around the globe, share prices are taking a dive following the crash of AIG.

Japan's economy is particularly vulnerable to a recession in the US, because that will badly impact on its exports to not only the US but also to China. And exports, particularly to China are the one reason that Japan has been able to make some recovery after those long two decades plus of stagnation.

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