Japan’s Financial Big Bang to Subprime Loan Debacles
Today, Japan’s Prime Minister Mr. Yasuo Fukuda is going to form a new cabinet.
As incumbent Chief Cabinet Secretary is expected to stay in the cabinet, the media is mostly arguing how many female politicians or experts will be assigned to cabinet ministers.
In other words, Chief Cabinet Secretary Mr. Nobutaka Machimura and new LDP Secretary-General Mr. Taro Aso are regarded as major candidates who will succeed Prime Minister Mr. Yasuo Fukuda, if Mr. Yasuo Fukuda should step down before the next General Election to be held within a year or so but the Democratic Party of Japan cannot come into power after the Election.
SECTION I: FINANCIAL BIG BANG IN JAPAN
In 1996, then Prime Minister of Japan Ryutaro Hashimoto launched the Japanese version of Financial Big Bang.
http://en.wikipedia.org/wiki/Ryutaro_Hashimoto
The aim was to consolidate the position of Tokyo as one of three global financial centers following New York and London.
There have been many arguments about success and failures in this drastic policy change of the Japanese Government.
Then Prime Minister of Japan Ryutaro Hashimoto claimed that if Tokyo evolved to "free, fair, and global" financial market, Japanese economy would be revitalized.
However, the fact is that elimination of bad loans was not accelerated; the Bank of Japan had to continue the policy of zero-interest rates distorting fundamentals; and the Tokyo Market could not be boosted to catch up with New York and London as a global financial center.
Nonetheless, private deposits worth US$ 1.2 trillion Japanese citizens had in domestic banks were freed to foreign financial institutes through proceedings of the Big Bang.
Yet, the unprecedented confusion and disarray in the financial sector and the remained recessional mood in the general public of Japan forced then Prime Minister Ryutaro Hashimoto to resign in the middle of his efforts to completion of the Big Bang.
Today, Ryutaro Hashimoto is in general considered to be a kind of failed prime minister of the past, though former Prime Minister Mr. Jyunichiro Koizumi as one of successors of Ryutaro Hashimoto enjoyed more reputation among, and support from, foreign financial institutes while driving his economic reform policy on the extension of the late Mr. Hashimoto’s paradigm.
SECTION II: PROOF BY SUBPRIME LOAN DEBACLES
Though there are strong criticisms against monetary and financial policies of the Japanese Government having been pursued from the Hashimoto Administration to the Koizumi Administration, it is true that a kind of Big Bang happened in the Japanese financial sector, introducing more freedom and chances to parties concerned.
But, the point at issue is that it does not look like contributing to improvement of performance of the Japanese financial sector as indicated by the global subprime loan-related financial crisis.
Japan’s Former Prime Ministers Ryutaro Hashimoto and Mr. Jyunichiro Koizumi look like having trusted the US financial sector too much.
Though the US financial sector had become nothing but a casino based on advanced financial technique, financial software, and IT machines, such Japanese politicians must have regarded it as a "free, fair, and global" arena regulated by justice and reason.
As now revealed clearly, the Mafia-like salesmen, with support from Wall Street and virtual silent approval from FRB, sold mortgage loans to poor American people called subprime clients who could not pay back at all from the beginning.
Consequently, the total amount of subprime-loan defaults is now believed to reach US$500 billion, though only $130 billion losses are so far identified in the US and European financial industries, which means still $300 billion or so losses are yet to be identified in terms of their whereabouts in a form of securitization.
( http://bunnyquest.blog119.fc2.com/blog-entry-29.html )
Anyway, Japanese politicians including Japan’s Former Prime Ministers Ryutaro Hashimoto and Mr. Jyunichiro Koizumi could not gain an insight into the true state of mentality and the paradigm of American businessmen in Wall Street.
They are not ordinary citizens. They are a kind of gangsters and the Mafia members.
The Japanese Government must not respect New York and London, since their money market has been proven to be just a casino eerily equipped with advanced financial technique, financial software, and IT machines which inevitably contributed to wider spread of losses related to the subprime mortgage crisis.
SECTION III: SETTLEMENT BALANCE
Mr. Bill Totten, a European-American Japanese-national businessman, concluded that Japanese Big Ban contributed to funneling deposits and savings of the Japanese people into overseas money markets, leading to large-scale reluctance of Japanese banks to loan to domestic businesses.
According to his estimation, in 1998 when the Big Bang started in Japan the total amount of outstanding credit of all the Japanese banks was US$5.3 trillion; but it was officially reported this May to be $3.9 trillion.
On the other hand the amount of bank savings in Japan changed from $4.4 trillion in 1998 to $5.9 trillion in this April.
( http://www.ashisuto.co.jp/corporate/totten/column/1187306_629.html)
So, as it shows that Japanese banks has operated funds excessively in overseas markets, it is natural to be suspected that $300 billion or so subprime-loan-related losses yet to be identified might be incurred by Japanese financial institutes.
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I do not think that US President Mr. George W. Bush has presented a clear perspective on what measures he will further take to prevent recurrence of the subprime loan crisis or the second subprime mortgage crisis of another $500 billion scale.
But, Japanese Prime Minister Mr. Yasuo Fukuda must not be duped any more by gangsters and the Mafia in Wall Street, no matter what financial and economic ministers he will chose on this cabinet formation.
What’s more, I can't help but be worried over the same old faces attending in an economic meeting Mr. Barack Obama hosted recently in New York or Washington D.C. as they were the same old faces I had often seen on TV in late 1990’s.
(Tonight the Japanese media, especially TV news stations will be busy introducing newly appointed ministers. However, I am yet to decide whether my recent habit to go to bed at 11 p.m. as much as possible should be abandoned tonight.)
Luk 8:1 And it came to pass afterward, that he went throughout every city and village, preaching and shewing the glad tidings of the kingdom of God: and the twelve were with him,
Luk 8:2 And certain women, which had been healed of evil spirits and infirmities, Mary called Magdalene, out of whom went seven devils,
Luk 8:3 And Joanna the wife of Chuza Herod's steward, and Susanna, and many others, which ministered unto him of their substance.
Luk 8:4 And when much people were gathered together, and were come to him out of every city, he spake by a parable:
Luk 8:5 A sower went out to sow his seed: and as he sowed, some fell by the way side; and it was trodden down, and the fowls of the air devoured it.
Luk 8:6 And some fell upon a rock; and as soon as it was sprung up, it withered away, because it lacked moisture.
Luk 8:7 And some fell among thorns; and the thorns sprang up with it, and choked it.
Luk 8:8 And other fell on good ground, and sprang up, and bare fruit an hundredfold. And when he had said these things, he cried, He that hath ears to hear, let him hear.