reacting very much as expected. they are reacting badly. the benchmark nikkei dropped 6%, a 634-point plunge effectively wiping out all gains made since the start of the year. the bleak news raises obvious concerns about how this will affect trading on the u.s. front and questions about how soon japan can recover from this huge loss. cnbc's steve leaseman joins me now. steve, what we're seeing here was pretty much expected, but explain to all of us, japan's economy has been in flux for some time now. >> yeah, it has been. i'll tell you there's a lot of comparison to the kobe earthquake and what happened back then, the damage was estimated about $100 billion and some of the early estimates we're seeing now is $170 billion. what you saw then was the bank of japan stepped in and put a lot of money to the economy, very much what we heard this morning. then the government spent some 3.4 trillion yen over several years rebuilding. that is expected again. bottom line, this is expected to