omg, Japan's GDP MURDERED in Q4

[Dari]

Originally posted by: marincounty
Can someone please explain why the US dollar continues to tank against the Yen?
The exchange rate is ridiculous.

The unwinding of the carry-trade.

Originally posted by: soccerballtux

Originally posted by: marincounty
Can someone please explain why the US dollar continues to tank against the Yen?
The exchange rate is ridiculous.

Deflation. Same thing that happened with the Euro against the dollar in Aug-Dec.

Wrong.

 

[nullzero]

Originally posted by: Farang
I don't understand how this equates to an annual decline of 12.7%. It seems sort of like saying the Great Depression equates to humans running around naked, murdering and eating one another over 100 years because that was the rate of decline in 1929.

Farang,

Its getting very bad out there... maybe you have not personally experienced it yet. Just saw a family begging outside the food store for food and money to buy a tent because they lost their jobs and home and have nothing. Also why would Japan cook their numbers and make it look worse then it is??? Make no mistake this is a great depression statistic.

 

[soccerballtux]

Originally posted by: Dari

Originally posted by: marincounty
Can someone please explain why the US dollar continues to tank against the Yen?
The exchange rate is ridiculous.

The unwinding of the carry-trade.

Originally posted by: soccerballtux

Originally posted by: marincounty
Can someone please explain why the US dollar continues to tank against the Yen?
The exchange rate is ridiculous.

Deflation. Same thing that happened with the Euro against the dollar in Aug-Dec.

Wrong.

Edit: nevermind.
Can you prove why it's this and not deflation-- why is it carry trade with Japan but not with the Euro; simply because of Japan's low interest rates?

 

[Farang]

Originally posted by: nullzero

Originally posted by: Farang
I don't understand how this equates to an annual decline of 12.7%. It seems sort of like saying the Great Depression equates to humans running around naked, murdering and eating one another over 100 years because that was the rate of decline in 1929.

Farang,

Its getting very bad out there... maybe you have not personally experienced it yet. Just saw a family begging outside the food store for food and money to buy a tent because they lost their jobs and home and have nothing. Also why would Japan cook their numbers and make it look worse then it is??? Make no mistake this is a great depression statistic.

1) I am as experienced as you can be in "it" this side of being homeless and begging, which in my opinion just shows a lack of planning except for in extreme circumstances. I am a highly capable college graduate being turned down for valet work because I'm competing with another 20 highly capable graduates looking for the same unskilled job. I am in debt. I've broke my back for the past 3 weeks fixing my car (clutch went out) to widen my range of available job locations. I have taken on a reasonable amount of debt to continue my education while I look for work. I have taken on part-time contract work which is basically slavery, simply to enhance my resume. Tomorrow I go to the unemployment office to interview for a referral to a job at a home improvement store as a cashier. Yippee.
2) Japan did not cook any numbers, a news organization did.

 

[nullzero]

I am as experienced as you can be in "it" this side of being homeless and begging, which in my opinion just shows a lack of planning except for in extreme circumstances.

I would have to disagree with this statement.... if you are a couple with a few kids and both have no family that you know of around that is still alive. Living paycheck to paycheck... to pay the rent and bills you could easily fall into poverty. A lot of people can actually fit this description... if you take out the family part I would say 50% of this country lives like this.

Farang,

I take it you live at home... so you do not have to worry if you cant make the rent to stay in a shelter.

 

[Zebo]

GDP is so overrated in the abstract not to mention so many other statistics comprise a healthy economy ....debt load, employment, CPI etc.

While high GDP is obviously good, it's how it's distributed that's important. Japan has a low Gini index people are paid well across the board.
Say I make $100 and you make a dollar is that good? Or I make $50 and you make $50 as well or is that better?
Bottom line Japan is model of share the wealth and savings and will remain healthy despite GDP being stagnant. Japan is far better off than we are.

 

[Ferocious]

Actually the USA is beginning to make the same mistake Japan did for so long. Government intervention was too little....too late. They too were afraid of the political backlash.

We need to do somethng to what Sweden did: take over the major involvent banks....clean them up and sell them....or liquidate them in a quick and orderly fashion.

Conservative Republican Lindsey Graham is starting to come on board with this idea. Hopefully more will join him....and hopefully sooner than later.

 

[Toonces]

I still have my job, they're not ridding themselves of teaching positions at public schools just yet

Oh, and the exchange rate of $ to ¥ has gone from 1:120 to 1:74 since I arrived, I love sending money home.

 

[StageLeft]

Originally posted by: soccerballtux

Originally posted by: Farang
I don't understand how this equates to an annual decline of 12.7%. It seems sort of like saying the Great Depression equates to humans running around naked, murdering and eating one another over 100 years because that was the rate of decline in 1929.

Haha. Well, it means if we took this quarter's decline, and said "what if that continued for 4 quarters [one year], what would the rate of decline be?"

Of course it hasn't declined for a full year so it's meaningless...makes for nice headlines though.

It does makes for headlines, but this is just how these numbers are reported--yearly. The US's recent GDP numbers were done at an annual basis as well. If I get a new job making $200k/year and you ask how much money I make I'll say $200k. I won't qualify that by saying "per year", because it's assumed, and even if I've only worked for a single day, I'm still being honest with you.

Make no mistake this is a great depression statistic.

It is. I think we'll be lucky if we don't get through this and see that a great deal of western nations have gone through a technical depression.

Actually the USA is beginning to make the same mistake Japan did for so long. Government intervention was too little....too late. They too were afraid of the political backlash.

Well maybe, either the US needs to be even more aggressive and really get in there soon or the US needs to back right off before it mirrors Japan's lost decade+.

 

[GTKeeper]

Originally posted by: Ferocious
Actually the USA is beginning to make the same mistake Japan did for so long. Government intervention was too little....too late. They too were afraid of the political backlash.

We need to do somethng to what Sweden did: take over the major involvent banks....clean them up and sell them....or liquidate them in a quick and orderly fashion.

Conservative Republican Lindsey Graham is starting to come on board with this idea. Hopefully more will join him....and hopefully sooner than later.

+ 1

Nouriel Roubini and Nassim Taleb are essentially saying the same thing. If we do the nationalization, equities take another 20-30% hit, if we don't, dont be surprised to see the S&P at 500 this year at some point.

 

[BarneyFife]

This guys puts George Bush to shame

The public appears to have lost faith in the leadership of Prime Minister Taro Aso, who has been in power less than six month. His approval rating fell below 10 percent in the most recent national poll.

 

[StageLeft]

Originally posted by: BarneyFife
This guys puts George Bush to shame

The public appears to have lost faith in the leadership of Prime Minister Taro Aso, who has been in power less than six month. His approval rating fell below 10 percent in the most recent national poll.

His main problem is he lacks the awesome anime-like haircut of their previous PM.

this guy He'd take a sword to the recession and cut it in half!

 

[Dari]

Originally posted by: soccerballtux

Originally posted by: Dari

Originally posted by: marincounty
Can someone please explain why the US dollar continues to tank against the Yen?
The exchange rate is ridiculous.

The unwinding of the carry-trade.

Originally posted by: soccerballtux

Originally posted by: marincounty
Can someone please explain why the US dollar continues to tank against the Yen?
The exchange rate is ridiculous.

Deflation. Same thing that happened with the Euro against the dollar in Aug-Dec.

Wrong.

Edit: nevermind.
Can you prove why it's this and not deflation-- why is it carry trade with Japan but not with the Euro; simply because of Japan's low interest rates?

Because investors used to buy foreign assets with Japanese yen. The reason was obvious (the Japanese interest rate was low and foreign interest rates were high). Because of the credit crunch, foreigners needed as much cash as possible so they sold all their foreign investments and closed their Japanese accounts (in effect, buying Japanese yens). This had the perverse effect of sending the value of the yen up compared to other currencies.

link

Up and away

Feb 5th 2009 | TOKYO
From The Economist print edition


Suddenly, talk is back of intervention to stem the yen?s rise

SINCE the summer, the yen has shot up against all major currencies. It is now 23.2% higher than last year?s low-point against the dollar, 46.7% higher against the euro, and 65% up against the tumbling pound. Manufacturers are screaming. Japanese exports are down by over a third compared with a year ago, and carmakers and electronics firms are slashing production and jobs. On February 2nd the Keidanren, a big-business club, declared the value of the yen, at under ¥90 to the dollar, to be manufacturers? most critical problem. They were, it said, ?crying out? for the government to weaken the yen, either alone or in league with other countries.

They may cry in vain. In trade-weighted terms the currency is not overvalued by historical standards (see chart). A long undervaluation has merely corrected itself. The exporters driving Japan?s recovery from 2002-07 made two false assumptions as they built new capacity: that American consumers would always buy Asian exports, and that ¥100-120 to the dollar was the sustainable long-term rate. Both were chimeras.

The yen?s undervaluation was what Eisuke Sakakibara, a former vice-minister of finance, calls a ?cheap-yen bubble?. Exceptionally low global financial-market volatility in the middle of the decade helped spur the famous yen carry trade. Foreign banks and hedge funds borrowed yen at low interest rates which they then sold, swapping the yen into higher-yielding currencies and profiting from the yield difference. Japanese retail investors followed a similar ploy, buying quantities of foreign-currency bonds for their higher yield. Some of what they bought were structured products sold by banks that protected investors against currency losses.

Since the summer, foreigners have unwound the yen carry trade with a vengeance, driving the yen up. Not only are retail investors (and writers of structured products) sitting on capital losses; overseas yields have also plummeted. Households? holdings of overseas securities, says Tohru Sasaki of JPMorgan Chase, remain huge?¥13.9 trillion at the end of September, the latest figures available, double the amount of a year earlier. He says that with unemployment set to jump and the economy set to shrink by, say, 5.7% this year, households will bring yen home. Mr Sakakibara predicts that a climb to ¥85 against the dollar will trigger a wave of stop-loss orders, sending the exchange rate quickly to ¥80 or even ¥75. The government would then face huge pressure to intervene for the first time since March 2004.

It will not want to dive in alone. In government a decade ago, Mr Sakakibara moved markets with his utterances. But in 1995-96, he points out, American and Japanese interests were perfectly aligned. This time, the support of Timothy Geithner, America?s new treasury secretary, is not assured. None of the industrial countries is keen to risk a round of competitive devaluations. Japan?s finance ministry may, some believe, have pulled out its swimsuit, but it remains reluctant to take the plunge.

 

[StageLeft]

Link

Japan tanking hard, car exports down 66%.

Japan's exports to the United States, the world's largest economy, dropped 52.9 percent, while Asia-bound shipments fell 46.7 percent from a year earlier, the ministry said. Japan's exports to the European Union declined 47.4 percent.

This is a country that has not been growing much for the past 15+ years anyway. They are getting pulverized.

 

[GTKeeper]

Originally posted by: Skoorb
Link

Japan tanking hard, car exports down 66%.

Japan's exports to the United States, the world's largest economy, dropped 52.9 percent, while Asia-bound shipments fell 46.7 percent from a year earlier, the ministry said. Japan's exports to the European Union declined 47.4 percent.

This is a country that has not been growing much for the past 15+ years anyway. They are getting pulverized.

First current account deficit in 15 years.

Oh btw, here is something even MORE SCARY....

Under Obama Stimulus they projected out that 8% unemployment would be 'the top' and we would gradually go down from there.... folks, we are at 8.1% RIGHT NOW.

 

[dullard]

Originally posted by: GTKeeper
Under Obama Stimulus they projected out that 8% unemployment would be 'the top' and we would gradually go down from there.... folks, we are at 8.1% RIGHT NOW.

Sounds like GM's financial plan last year: they predicted in the WORST CASE SCENARIO that 2009 would have significant sales gains over 2008 and that the gains would continue each year after that.

Why can't our "leaders" in politics or business ever give a true range of possibilites in their scenarios? Instead of cherry picking a rosy situation, why not give a rosy situation and a bleak situation. Then we'd know the likely range of possibilities.

 

[StageLeft]

Obama also has I think the idea that GDP will go up next year at 3.1%.

 

[GTKeeper]

Originally posted by: dullard

Originally posted by: GTKeeper
Under Obama Stimulus they projected out that 8% unemployment would be 'the top' and we would gradually go down from there.... folks, we are at 8.1% RIGHT NOW.

Sounds like GM's financial plan last year: they predicted in the WORST CASE SCENARIO that 2009 would have significant sales gains over 2008 and that the gains would continue each year after that.

Why can't our "leaders" in politics or business ever give a true range of possibilites in their scenarios? Instead of cherry picking a rosy situation, why not give a rosy situation and a bleak situation. Then we'd know the likely range of possibilities.

As much as blowhard Kudlow 'hate' Keynesian economics, it plays a huge part. The problem with these estimates is that people right now think things are better than they are and will get better more quickly then they will. Its partially mental/psychological. If the market always valued itself correctly, you could never anticipate any major moves or find any undervalued companies.


I will keep 'preaching' that until the credit default swap mess is resolved we are spiraling into an abyss. Simple as that.

 

[rudder]

Originally posted by: Ferocious
Actually the USA is beginning to make the same mistake Japan did for so long. Government intervention was too little....too late. They too were afraid of the political backlash.

We need to do somethng to what Sweden did: take over the major involvent banks....clean them up and sell them....or liquidate them in a quick and orderly fashion.

Conservative Republican Lindsey Graham is starting to come on board with this idea. Hopefully more will join him....and hopefully sooner than later.

Japan thought they could also jumpstart their ecomony by eventually pumping $6.5 trillion into the economy through stimulus projects.

 

[GTKeeper]

Originally posted by: rudder

Originally posted by: Ferocious
Actually the USA is beginning to make the same mistake Japan did for so long. Government intervention was too little....too late. They too were afraid of the political backlash.

We need to do somethng to what Sweden did: take over the major involvent banks....clean them up and sell them....or liquidate them in a quick and orderly fashion.

Conservative Republican Lindsey Graham is starting to come on board with this idea. Hopefully more will join him....and hopefully sooner than later.

Japan thought they could also jumpstart their ecomony by eventually pumping $6.5 trillion into the economy through stimulus projects.

They propped up zombie institutions, that was the problem. Pumping money in is fine, but you need to seperate the good guys from the bad ones and let the bad ones fail.

 

[StageLeft]

Originally posted by: GTKeeper

Originally posted by: rudder

Originally posted by: Ferocious
Actually the USA is beginning to make the same mistake Japan did for so long. Government intervention was too little....too late. They too were afraid of the political backlash.

We need to do somethng to what Sweden did: take over the major involvent banks....clean them up and sell them....or liquidate them in a quick and orderly fashion.

Conservative Republican Lindsey Graham is starting to come on board with this idea. Hopefully more will join him....and hopefully sooner than later.

Japan thought they could also jumpstart their ecomony by eventually pumping $6.5 trillion into the economy through stimulus projects.

They propped up zombie institutions, that was the problem. Pumping money in is fine, but you need to seperate the good guys from the bad ones and let the bad ones fail.

And the US is propping zombies now, case in point if there ever was one GM, which couldn't even be profitable during the false-boom of the economy before this recession. The US is clearly repeating some of Japan's mistakes.