fredag 10 oktober 2008

Global Credit Squeeze Strangles Yamato Life - Forbes.com

Global Credit Squeeze Strangles Yamato Life - Forbes.com: "The global credit crunch claimed yet another casualty--this time a privately held major insurer in Japan. Yamato Life Insurance declared bankruptcy on Friday, after an ill-timed shift toward riskier securities doomed its portfolio once the credit crisis began to spread beyond U.S. borders.

Helge: The crisis is taking big tolls around the world.

Yamato's failure is Japan's first bankruptcy by an insurer since 2001, when Tokyo Mutual Life collapsed. Yamato, which has a 98-year history, reported debts of 269.5 billion yen ($2.73 billion), exceeding assets by 11.5 billion yen ($116 million). Japan's finance minister, Shoichi Nakagawa, called Yamato's collapse 'extremely regrettable' and said that 90% of the insurer's policies were guaranteed by law.

Helge: Old companies go bust.

'Yamato's been vulnerable for some time. Recent events seem to have been the straw that broke the camel's back,' said Tokyo-based analyst David Threadgold at Fox-Pitt Kelton Cochran Caronia Waller.

Yamato weighted alternative investments more heavily in its portfolio--about 30% at the end of September--in pursuit of higher returns. The strategy proved fatal, as the fallout from the U.S. housing crisis eventually caused credit markets to seize up and investors to flee equities for safer cover in government bonds.

Helge: Higher returns...Sounds like Icelandic banks.

Insurance companies in Japan generally have "meaningful" equity investments but also large capital bases, said Threadgold. "I wouldn't expect this to be a general problem" among Japanese insurers because publicly listed companies appear well capitalized, he added."

The story below was written 2006.

Housing Slows, Taking Big Toll on the Economy


By VIKAS BAJAJ and DAVID LEONHARDT
Published: July 29, 2006

The housing industry — which largely carried the American economy through the tribulations of the 2000 stock-market crash, a recession and climbing oil prices — has lost its vigor in recent months and now has begun to bog down the broader economy, which slowed to a modest 2.5 percent growth rate this spring.







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