For anyone who experienced Japan's near financial meltdown in 1997, the gloom and doom news coming out of the US sounds more than vaguely familiar. Late in 1997, the sudden failure of Sanyo Securities nearly froze up Japan's short-term money markets, just as the sudden failure of Bear Stearns threatened to. The appearance of a white-faced central banker assuring the public that everything was under control is like Ben Bernanke and Hank Paulson on TV and before Congress singing off the same song sheet.

In Japan's case, the rapid fire failure of Yamaichi Securities, Sanyo Securities, Hokkaido Takushoku Bank, Japan Long-Term Credit Bank and Nippon Credit Bank marked only the beginning of Japan's financial crisis and the "Heisei Malaise". Bank losses in the US are already $500 billion and counting one year into the crisis, but the imploding housing market is nowhere nearer hitting bottom, while Freddie Mac and Fannie Mae are like the living dead in the Zombie movies--waiting for someone to put them out of their misery.

The zombies are unable to procure capital at virtually any price, as everyone "knows" their balance sheets are rife with toxic waste of unknown (and depreciating) value. In the 1990s, everyone "knew" that Japan's major banks were virtually bankrupt, but the government and most of the banking industry pretended it wasn't so, because admitting such could cause the feared run on the bank (s) aka the long lines of depositors trying to get their money back that are shown in pictures of the Great Depression.

The game then, as now, was how much the losses would eventually be. A Goldman Sachs analyst almost caused an international incident when he predicted the losses would be as high as JPY200 trillion, or roughly US$2 trillion. His name officially became mud in Japanese banking circles. Sound familiar? This is the current estimate of losses now given by Noriel Roubini, who has consistently been pounding the table about the seriousness of the situation. In the end, the 17 major banks in Tokyo were squeezed down into essentially three "megabanks" that are still struggling to establish their unique (and profitable) niche in the new world. The juggernaughts of global finance will be much different animals once they emerge from this crisis--that is, if they survive.

One year into the US subprime crisis, and its looking more and more like Japan's financial crisis.