Professor Elam

Tuesday Jan 19, 2009

JAL will file bankruptcy under their equivalent of our Chapter 11 re structuring.

Some 15,000 will lose jobs, the stockholders are wiped out, the government is putting up $10 B in Japan;s fourth largest bankruptcy ever. 

The President of JAL resigned, gee why don't we ever see that here?

The story here is of the two not just one lost decades inJapan. Their stock market topped in 1990 and is now only half its value then. 

IN the 1980s the US actually aired  a television show titled If Japan Can, Why Can't We? It told the story of Dr. Deming and TQM. What went wrong? Too much debt was taken on in the stock market run up. Rather than let companies go bankrupt, the banks tried to paper over the losses. JAL owed $25 B. Does this picture sound like our banks?  Ironically Greenspan even went to Japan and told them to write off the bad loans. 

We made  a post last evening explaining how mood turns negative in bear markets. Understanding the socionomic psychology behind bad decisions will help you  the next few years. Note this market pretty well mirrors the two crashes the US has experienced 2000-02 and 2008. Another is coming.