-Caveat Lector- from: http://www.aci.net/kalliste/ <A HREF="http://www.aci.net/kalliste/">The Home Page of J. Orlin Grabbe</A> ----- Japanese Banking Long-Term Credit Bank Faces Heat Over Loan Mess How to hide bad loans Tokyo prosecutors and police are preparing to press criminal charges against former board members of the Long-Term Credit Bank of Japan (LTCB) on suspicion they violated the Securities and Exchange Law and the Commercial Code by underreporting the extent of the bank's bad loans when they closed the books on fiscal 1997, sources said over the weekend. Investigators say they suspect the former directors manipulated some of the figures on the bank's balance sheet to keep paying dividends to shareholders, the sources said. Investigations by the Tokyo District Public Prosecutors' Office and police are focusing on the treatment of the bank's loans to some of its affiliated non-bank financing companies, the sources said. The bank was put under government-supervised management last year after collapsing under the weight of non-performing loans. The sources said the bank's accounts reported in May 1998 showed it still had 46 billion yen at the end of fiscal 1997 after writing off 610 billion yen in bad loans. On the strength of that report, the bank issued a total of 7.18 billion yen in shareholder dividends. But other sources familiar with the bank's accounting procedures and internal reporting said the bank had manipulated some of the figures in terms of the way loans were evaluated to make the amount of loans to affiliated non-banks and other affiliated businesses regarded as uncollectible would look smaller than the real total. The Financial Supervisory Agency concluded, based on its July 1998 examination of the bank's records, that the LTCB had underreported its uncollectible loans by about 130 billion yen. Investigators believe that a proper evaluation of all the bank's uncollectible loans would have resulted in a balance sheet with no surplus left to be distributed to shareholders as dividends, according to the sources. Prosecutors and police have been investigating the LTCB case in cooperation with the Securities and Exchange Surveillance Commission. They have examined documents on the bank prepared by the Financial Supervisory Agency and the bank's loans on a case-by-case basis. At the same time, the investigators have questioned former executives of the bank's divisions responsible for its accounting policy and practices, the sources said. As a result, they have discovered that the bank had used its affiliated companies to hide some non-performing loans. The most manipulative element of the bank's alleged window dressing was the removal of as much as 100 billion yen from its own books by using three of its related companies including Nippon Lease, according to the sources. Police and prosecutors say they believe that the former board members of the bank had been involved in manipulating the account records and that they thus should be held criminally accountable for their acts, the sources said. Asahi Shimbun, May 17, 1999 Der Fuhrer Invades Yugoslavia The Current Status of the War Against the Serbs "Clinton cannot appear to have fought this war for nothing." As the new week begins, it is time to take stock of the war. This is not particularly difficult as we have clearly entered a period of stalemate in which neither side is able to bring the conflict to a close and indeed, for the moment, neither side is motivated to bring it to a close. From the NATO perspective, the air war is not particularly costly or risky. Given the fragility of the NATO coalition, the policy of air war intensification without either a diplomatic breakthrough or a ground war is the lowest risk option. The advantage of this strategy is threefold. First, it keeps open the possibility, however distant, that the Serbs will crack under the bombing attack and capitulate to NATO’s demands. Second, absent that, it allows NATO to keep further war fig hting options open while also keeping open diplomatic options. Third, as we have said, it also avoids decision-making in NATO’s councils. The less decision-making goes on, the less likely the coalition is to come apart. >From Belgrade’s side, the stalemate is also acceptable. First, while daily tragedies occur, from a strictly military viewpoint, the bombing is not affecting Sebia’s long-term war fighting capability. The light infantry forces that would be used in an extended resistance to a NATO invasion are not being sufficiently hurt by the bombing to force a strategic reconsideration. Second, Milosevic’s political standing has been strengthened by the bombing. While NATO’s psychological warfare staff is trying to generate a sense of impending disintegration in Milosevic’s support, both among civilians and military, and some war weariness is certainly setting in, it is our view that the sense of victimization at the hands of NATO is sufficient to hold his support together. Appearing to be too eager to seek a settlement may actually hurt him rather than help him. Finally, the Russian internal political situation has become so unsettled that the basic premise that allowed Milosevic to resist NATO has become problematic. It is in Milosevic’s interests to wait until the situation in Moscow clarifies itself and hopefully the pro-Serb factions reassert themselves, before entering negotiations. Thus, the major tendency is toward gridlock. There are, however, forces on the horizon that can generate movement. On NATO’s side, the Italian political situation is deteriorating daily. The government could move into crisis by mid-week over the bombing issue. That political crisis could end the war unilaterally. Should Italy deny NATO the use of its air bases for the bombing campaign, it would signal the end of the war. Italy is absolutely necessary for the war. This means that NATO, in anticipation of the outcome of the Italian crisis, might be forced to seek some diplomatic initiatives. Indeed, the Italian situation is one reason that Milosevic not only might, but must, hold out. It is his major hope for a breakthrough. Yugoslavia has its own pressures leading it to make concessions. While the current situation in Moscow is an argument for waiting, there is tremendous long-term danger there for Yugoslavia. If victory in Moscow’s political wars goes to western-oriented leaders, which might happen if only for a short time, and Milosevic loses his support from that quarter, his strategic position will deteriorate dramatically. China is simply too far away to matter. A shift in Moscow could trigger a shift in Greece and Macedonia, opening the way to a ground war. In addition, while the air campaign is not decisive, it does hurt. All of these factors cause movement toward diplomacy. The key question continues to be the makeup of the peacekeeping force and the quantity and type of force Serbia will be permitted to keep in Kosovo. It is interesting to us that the discussions on this seem to be going on in slow motion. Discussions that should take hours are taking days. Discussions that should take days are taking weeks. One reason for this is the situation in Moscow and Rome. But the underlying problem is that each side believes that the other’s problems are more serious than its own. Milosevic hopes that Clinton’s problems with Rome will cripple him. Clinton hopes that Milosevic’s problems with Moscow will cripple him. >From our perspective, there is an ongoing tragedy here. There is a clear structure for a peace agreement in place. It has been there from the beginning. The discussions have now degenerated to what weapons peacekeepers will carry. The real problem is not one of substantial issues, but of appearance. Clinton cannot appear to have fought this war for nothing. Milosevic cannot appear to have put his country through this pounding for nothing. Each must find a way to claim victory while allowing the other to do the same. In an odd way, Clinton and Milosevic are similar men. They are willing to fight wars for domestic political reasons even when the strategic issues could be settled fairly readily. Each knows that the victory he wants is impossible. Clinton cannot invade Serbia and impose a new government. Milosevic will not be able to avoid foreign troops in Kosovo. Each is more concerned about how the final, obvious agreement will be arrived at than what that agreement will contain, because each knows pretty much what will be in the agreement. It is not a question just of stubbornness, although both are extraordinarily willful men. Rather, it is the reasoning behind fighting wars. Wars fought for geopolitical reasons are ultimately manageable. Wars fought for domestic political reasons are the hardest to solve. That means that the nations whose geopolitical interests are most affected by this--Italy, Germany and Russia--will ultimately have to take responsibility for imposing an agreement. The problem is that everyone’s attention is on other things, and there is no pressing urgency in the war. That is the most extraordinary fact: Kosovo refugees and the bombing of Serbia aside, no one at all seems to feel a sense of urgency. This has surprised us during the past few weeks and it continues to surprise us. However, if we had looked closely at the careers of these two men, perhaps we would have been less surprised. For men to whom appearance is everything, how war is settled can be more important than what is achieved. Stratfor Special Report, May 16, 1999 ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. Roads End Kris DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance—not soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRL gives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credeence to Holocaust denial and nazi's need not apply. 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