“Up until now, bankruptcies were concentrated in the real estate and construction sectors, but the trend has widened to collapses across a broad range of industries,” said Nobuo Tomoda, an analyst at credit and bankruptcy research firm Tokyo Shoko Research Ltd. “It’s getting harder to obtain funds.”Shinsei Bank, which is owed 54 billion Yen by SFCG, has already seen its shares hammered in early Japanese trading, down 7% as of last. As the Japanese government is not an endlessly money printing piggy bank unlike its US equivalent, SFCG Chairman was heard saying:
“We can’t get funding from almost any financial firm. Ever since the bankruptcy of Urban last August, procuring funds has become almost impossible.”The bottom line is that the global economy is getting exponentially worse, and the only way to even be on the right way out of the current debacle is to take all the necessary massive losses as soon as possible, wipe out numerous classes of existing investors and start afresh. Sphere: Related Content
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2 comments:
I don't think you should read too much into this as SFCG is a semi-legitimate subprime lender with a history of questionable collection practices that relied very heavily on foreign banks. Given a hasty retreat by cash-strapped foreign banks from the Japanese market it is not at all surprising that they are failing as Japanese banks have never been keen to lend to these players.
Also these lenders have been hit very hard by excess interest suits from borrowers following a cut in interest rate that can be charged legally. So to cite SFCG bankruptcy as an example of how bad credit crunch is, I think, is rather misleading.
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