My Name Is Nomura S.

The biggest Japanese brokerages stand up and tell their tale of derivatives addiction. Will they ever learn?

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TOKYO: At Alcoholics Anonymous, they call this bottoming out. On a single day, Japan's three biggest brokerage houses stood up and recounted the financial nightmare of the past six months. The numbers are staggering -- the biggest firm, Nomura Securities, lost $1.76 billion and plans to lay off a fifth of its employees -- and of course it can always get worse. But optimists hope that a painful lesson has been learned. This might be where the healing starts.

"Competition for business in the future is going to depend on how much confidence Japanese investors have in these companies," says TIME senior economics reporter Bernard Baumohl. "That means a comprehensive review of their strategies -- less risk, better decisions and more transparency." Baumohl says that Japanese banks are already losing spooked customers to U.S. outfits such as Citibank. The brokerage houses face similar defections. Maybe they'll be scared straight.