Re: RE: Japan

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

And the bond ratings companies gave Enron consistently good ratings.

On Tue, Jun 04, 2002 at 05:46:35PM -0700, Devine, James wrote:
> It strikes me that Moody's did to Japan what the IMF did to Argentina and a
> lot of other countries. It will raise the interest rates that Japan has to
> pay... It's like a movement by finance capital to punish countries that
> don't live up to neoliberal ideals. But in this case, Moody's isn't held
> responsible by anyone. Even the IMF has to answer to its stockholders (the
> US and other rich countries).
>
> Jim Devine jdevine@xxxxxxx &  http://bellarmine.lmu.edu/~jdevine
>
>
>
> > -----Original Message-----
> > From: Ian Murray [mailto:seamus2001@xxxxxxxxx]
> > Sent: Friday, May 31, 2002 11:16 AM
> > To: pen-l
> > Subject: [PEN-L:26476] Japan
> >
> >
> > [The Guardian]
> > Japan furious at credit downgrade
> >
> > Staff and agencies
> > Friday May 31, 2002
> >
> > Just as the Japanese government was reassuring the world that its
> > economy was picking up, Moody's Investors Service today cut the
> > country's credit rating by two notches.
> >
> > The move marks the second credit rating cut in six months and ranks
> > Japan, the world's second biggest economy and largest creditor nation,
> > in the same league as Cyprus, Greece and Latvia.
> >
> > The downgrade provoked a furious response from Haruhiko Kuroda, the
> > finance ministry's vice minister for international affairs, who called
> > the downgrade "completely inappropriate" and demanded an explanation.
> >
> > "Of course we want them to reconsider, and we will be requesting that
> > they do just that," he added.
> >
> > The cuts follow similar downgrades last month by Standard &
> > Poor, which
> > blamed the lack of progress in government reforms to tackle
> > public debt.
> >
> > Moody's slashed its rating for yen-denominated domestic securities
> > issued or guaranteed by the Japanese government by two notches, to A2
> > from Aa3. Moody's last cut the rating in December.
> >
> > The agency said the level of government indebtedness "will approach
> > levels unprecedented in the postwar era in the developed
> > world, and that
> > as such Japan will be entering 'uncharted territory'."
> >
> > By the end of March, Japan's public debt stood around 675,000 billion
> > yen (£3,800bn) or about 135% of gross domestic product, higher than
> > nearly any other industrialised country.
> >
> > The prime minister, Junichiro Koizumi, has promised reforms
> > to clean up
> > massive bad debts at Japanese banks, rein in public spending and turn
> > over money-losing public businesses to the private sector. He has also
> > pledged to cap new government debt issues at 30,000 billion yen.
> >
> > But many analysts say Japan's decade-long economic slump is far from
> > improving, and warn that lawmakers are failing to grasp the
> > magnitude of
> > the crisis.
> >
> > The problems are only made worse by Japan's ageing population, which
> > will force the government to spend more on health and
> > retirement, and by
> > bad loans overhanging private banks.
> >
> > Moody's predicted that domestic debt would worsen over the next few
> > years but that several features would prevent Japan from
> > plunging into a
> > medium-term crisis. Among them were Japan's high household
> > savings rate
> > and the small scale of the government's exposure to foreign creditors.
> >
> > Japan's benchmark 225-issue Nikkei stock average fell 6.33 points, or
> > 0.05 percent, to 11,763.70, erasing morning gains on news of
> > the Moody's
> > downgrade.
> >
> >
> >

--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx