http://www.businessweek.com/1998/20/b3578003.htm

Business Week, May 18, 1998 

Japan’s Debt Trap

                    OFFICIAL LEVEL

PUBLIC              About 100% of GDP,
DEBT                or $4.5 trillion.
                    That's on a level with
                    such highly leveraged
                    Western countries as
                    Belgium, Canada, and
                    Italy.

NONPERFORMING       About $600 billion. The
BANK LOANS          government has recently
                    admitted to that much
                    after claiming for years
                    that it was only about
                    $200 billion.

CORPORATE           Debt exceeds equity
LIABILITIES         by an average of 4
                    to 1 in the corporate
                    sector. That level is
                    forcing companies into
                    bankruptcy at a record
                    rate.

PROPERTY            Official Level. Japan's
PRICES              commercial and household
                    real estate is still valued
                    at $17.5 trillion.


                    PROBABLE LEVEL
				 
PUBLIC              Actual public debt could be as
DEBT                much as 250% of GDP, making
                    Japan the most indebted nation
                    in the industrialized world. To
                    reach that number, analysts throw
                    in the debt of Zaito, an off-bal-
                    ance-sheet government lender.

NONPERFORMING       More like $770 billion, according
BANK LOANS          to the ratings firms. The extra
                    $120 billion is bank declared
                    nonperforming but probably
                    not being serviced by distressed
                    corporate borrowers.

CORPORATE           The situation is likely to be worse,
LIABILITIES         since poor accounting does not reveal
                    borrowings overseas or pledges to
                    cover the debt of corporate affiliates.
                    Private pension plans totaling
                    $600 billion are underfunded by as
                    much as 40%.

PROPERTY            A markdown of 10% to 30% is
PRICES              probably necessary. That means
                    households with mortgages are sit-
                    ting on $250 billion in paper losses.