Japan’s economy at risk of collapse

The scope of the crisis is daunting. The Japanese economy hasn’t grown in more than 12-years. The stock market, down 76 percent from its peak, is hovering near a 19-year low. The country’s budget deficit is now 140 percent of GDP — the highest of any developed nation.

And, to add insult to injury, the nation’s assets are deflating. Prices, including home values, are coming down.

At the heart of it all: a banking crisis that makes America’s 1980s savings and loan industry scandal look like chump change. Japanese banks are thought to be carrying $1 trillion in bad loans on their books.

“Simply postponing that problem will not solve it; time will not heal this,” said Robert Feldman, chief economist for Morgan Stanley in Tokyo. “I think the rest of the world has seen 10 to 12 years of not addressing the problem."