Re: Yen still overvalued

["Charles Jannuzi" <jannuzi@xxxxxxxxxxxxxxxxxxxxxxxxx>]

> There used to be a speculation that Japanese banks may repatriate
> overseas funds to write off a part of their bad loans before they
> close their fiscal year account at the end of this month. Can you
> comment on the likelihood of this and its possible effects?
>
> Sabri
>

I hear this every year from those trying to encourage apocalyptic thinking
(like analysts for hedge funds and Swiss annuity peddlers).

I don't think it likely they all would repatriate everything all at once. It
would be suicide. I suppose if the gov't prompted a wave of foreclosures
(by, for example, letting the vulture funds take over the loans) and it
caused a panicked inrushing of funds to prevent mass foreclosures.  But the
loans were are always talking about are a lot more diversified and complex
than the vulture capital analysts always say.


Japanese firms more than other globalized ones have to balance their
investments all around the triad and they have to make currency movements a
major concern. Everyone thinks Japan=export concerns, but every export, no
matter how much value added, has a major input, and this is always imported.
The country imports all its resources except water. If you've ever run a
business in Japan, you know just how easily one thing happening in the world
markets can be your ruin.

Charles Jannuzi