back in the 1970s and 1980s. At one point, the real estate in Tokyo had a paper value greater than all of the land in the United States. Banks speculated in land and freely lent big bucks to land owners, no matter how small the parcel.

When reality hit with a vengence, their banking industry was in a really bad way. According to the linked article, Japanese banks hold over $500 billion in bad debt (other souces put it as high as a trillion dollars). From what I've read, that is behind the decline in their stock markets and why their economy has been in recession for over 10 years with no end in sight.

Think it couldn't happen here? Think again. US banks hold many billions in debt for corporations like Enron and Worldcom as well as "developing nations" like Brazil. That's one reason why the stock market surged earlier this week when it was announced that the International Monetary Fund (read: US taxpayers) will send $20 billion in aid to Brazil. The stock values of banks holding a lot of Brazil debt increased sharply on the news.