2. Japan’s stock market is 70 to 80% below its highs in 1989 falling from 38,957 to an average of 8,000 to 12,000.

3. Japan has $19 trillion of savings. Much of the savings is invested locally and monies financing Japanese public debt.

4. Japanese companies have been saving for the last few years. Companies have become net savers rather than net borrowers.

5. Japanese banks hold 65-75% of all Japanese government debt. JGB represent 24% of all Japanese Bank assets. (http://www.economonitor.com/blog/2013/01/the-setting-sun-japans-forgotten-debt-problems/)

6. Bank of Japan holds $1.2 trillion in government debt. Low interest rates have allowed larger piles of debt.

7. Deflation in Japan has allowed Japanese investors high real rates of return because of falling prices.

8. Japan has $4 trillion in foreign assets

9. Foreign investors own about 9% of the Japanese Government Bonds

10. In a balance sheet recession demand for credit declines even as more credit becomes available.

11. Japanese household saving rates are declining from 25% in the 1980s to 3% currently.

12. Territory disputes with China have decrease Japanese exports to China

13. Japan’s decision to shut-down nuclear power plants has increased liquid natural gas energy import costs.

14. Japan will reach the maximum amount it can borrow around 2015 affective 2020.

15. Bank of Japan owns $1 trillion of US Treasuries.

16. Hedge funds are shorting the yen and shorting Japanese Government Bonds betting on fiscal policy ineffectiveness.

17. Japanese insurance companies will collapse if banks don’t provide the finances for their operations and losses. Tokyo Mutual Life with liabilities of $7.9 billion collapsed when Daiwa denied a $300 million loan to cover current losses but gave Daiwa a profit reporting for the year. Tokyo life losses occurred as the Nikkei stock market and real estate corrected downward in the late 1990s. 700,000 policy holders were affected. Banks let companies hit the credit wall and go insolvent. Japanese banks had $320 billion in bad debt, in 2001. Today, the bad debt exceeds a trillion dollars. (http://www.wsws.org/en/articles/2001/03/japa-m30.html?view=print)

18. Will Japanese Bank write off their bad debt and restructure? Will Japanese banks decide to liquidate their foreign holdings to repatriate funds and shore up their balance-sheets. A sell off of treasures, direct investments in marketable bonds, and assets by the Japanese will put negative downward pressure on jobs in America.