'Japan is no longer a 1st-class economy'

[Taro Toporific]

Japan no longer 'first-class economy,' says Ota
Friday, January 18, 2008 at 16:27 EST / JapanToday.com
TOKYO --Economic and fiscal policy minister Hiroko Ota stressed ..while delivering a policy speech in the Diet at the start of the 150-day regular parliamentary session... "Unfortunately, Japan is no longer in a situation in which the nation is a first-class economy."
Japan's gross income has dropped below 10%[color="Silver"] [sic][/color] for the first time in more than 20 years, and the country's gross domestic product per capita has fallen among the Organization for Economic Cooperation and Development member countries...more...

[Jack]

Pretty much stating the obvious and without a plan to reverse the trend. Having observed Japan's economy for a long time, I am convinced that the Bank of Japan in conjunction with the banking system has to introduce some inflation in the economy. I don't mean inflation in the usual sense of price inflation but what used to be called the M1 money supply. Banks have to start loaning money and changing the way they operate in order to extend more consumer loans. For example, they could easily change the credit card payment system immediately to allow people to carry a balance if they wish without having to make that decision at the cash register.

There is so much borrowing room with Japan's consumers that the money supply can dramatically increase to stimulate the economy and get Japan back on the economic map.

[Tsuru]

Banks have to start loaning money

Wait... what?

Isn't that what they have been doing for the last 500 years?

[Jack]

Wait... what?

Isn't that what they have been doing for the last 500 years?

Not in Japan buddy.

Just trying to put fewer words here to limit the potential number of words exposed for nitpicking.

[Tsuru]

So what have they been doing then?

[alicia454]

What do you expect from a country with so much corruption, class boundaries, risk aversion, xenophobia in a global economy, and a lack of sufficient natural resources?

Lets see if the Japanese will continue to vote in the same corrupt racist old farts that brought the country to its current state.

Want to bet that Japan will continue on a downhill economic spiral for many more years, while the public accept the token scapegoating by Japanese politicians. I guess that the public here is happy about Japan's economic suicide.

A few foreign branch companies in Japan, including the one I work for, are planning to close their Japanese offices and relocate elsewhere in Asia, due to increasing xenophobia. I'm sure that helps the economy. Not to mention fingerprinting the tourists, even though tourism is the biggest economic section in the world.

It really is a shame, I know a number of really decent (especially non-racist) Japanese who will become innocent victims of the country's continuing economic woes. While the powerful racist elite that caused this mess will be okay.

[Jack]

So what have they been doing then?

OK, I'll bite. Japanese banks invest in stocks with deposits. They will buy bonds in the US earning 5% or higher while they pay 0.35% on deposits in Japan. Shall I continue or you get my drift?

Try getting a personal line of credit or a personal loan. Good luck.

[Greji]

Try getting a personal line of credit or a personal loan. Good luck.

I have had real estate loans, home morgages, "reform loans" and school loans. My kids have had student loans.

Talk about something you know something about, like buying pussy with many large bills.

[GuyJean]

I have had real estate loans, home morgages, "reform loans" and school loans. My kids have had student loans..

Yeah, I thought there was a thread about banks begging us to take out loans at no interest.. I couldn't find it. Maybe it was the home loan thread?

GJ

[Mulboyne]

Well, Jack is right here. The sarakin industry exists precisely because Japanese banks have been reluctant to extend unsecured personal loans. You can get a loan to buy a home more easily because banks will view the land as collateral but it's a different matter to get a bank loan to start a business, pay for a wedding or put down a deposit and key money for rental accommodation. Japanese banks don't generally offer automatic overdraft facilities to account holders which is why the sarakin ads recommend that you use one of their ATMs if you find yourself in a tight financial spot when taking out your girlfriend towards the end of the month. Once you have money and assets, of course, banks will fall over themselves to offer you loans. You can argue that unsecured lending standards elsewhere are too lax but given that banks and the post office are the leading Japanese deposit-taking institutions, it is a big problem that they haven't found a way to steer some of that asset base towards individuals rather than industry.

[Takechanpoo]

Want to bet that Japan will continue on a downhill economic spiral for many more years, while the public accept the token scapegoating by Japanese politicians. I guess that the public here is happy about Japan's economic suicide.

Whuh?

Which fucking country are you talking about?
Of course U.S, arent you? Huh?
What do North American have except for vulture and military?
AngloSaxon empire will be over within 10~20 years. Worry about yourself.
Japan is one of the counties which can survive in this-time sub-prime great depression.
Remember that.

[Greji]

Whuh?

Which fucking country are you talking about?
Of course U.S, arent you? Huh?
What do North American have except for vulture and military?
AngloSaxon empire will be over within 10~20 years. Worry about yourself.
Japan is one of the counties which can survive in this-time sub-prime great depression.
Remember that.

Wait to stick up for the country Take, but just keep checking your rent!

[Catoneinutica]

Whuh?

Which fucking country are you talking about?
Of course U.S, arent you? Huh?
What do North American have except for vulture and military?

AngloSaxon empire will be over within 10~20 years. Worry about yourself.
Japan is one of the counties which can survive in this-time sub-prime great depression.
Remember that.

Take, you piss-taker, you!

Let's see: Japan's share of global GNP is something like 9% now - the same as it was in...wait for it...nineteen-eighty-fookin'-two! In 10~20 years, I predict it'll be the same as it was in 1964.

-catone

-another prediction: smell-o-vision will have replaced television

-I already know my fortune: it's partying!

[GuyJean]

.. but it's a different matter to get a bank loan to start a business, pay for a wedding or put down a deposit and key money for rental accommodation....

Isn't that what that trillion yen, .002% interest collecting, mommy/daddy/grandma/grandpa bubble account is for? Why 'borrow' when you can 'receive'?..

GJ

[Mulboyne]

There's still a large pool of savings but there are plenty of people - especially the young - who don't have any. While the country has a high home ownership ratio, around 40% of households are renters and not many of those will have significant assets elsewhere. The function of a bank is to channel funds from savers to borrowers but the personal loan business was undeveloped as funds were directed towards industry - a major reason the sarakin stepped in.

[Catoneinutica]

A classic example: Mizuho just sunk 140 billion yen in Merrill Lynch. Corporate Japanese investment in American assets being the contrary indicators that they are, they probably won't have much to show for it in a few years' time.

Now, they _could_ have spent the money on making more loans available to individuals and small businesses, increasing deposit rates, and lowering fees, but that would run contrary to the Finance Ministry's tried-and-true "1940 Model" of impoverishing the J-consumer to finance overseas economic expansion.

Take, if you're really Japanese, and a consumer, tell us: how much more punishment are you willing to take?

[Jack]

The biggest impediment to growth in Japan since the bubble burst is he ability of consumers to get loans and grow the economy. That has not been available. And yet, Mitsubishi or worse yet, some large insolvant construction company can get loans.

Once money inflation is introduced in the system that will eventualy translate into price inflation which would help everyone. Japan can handle price inflation of up to 5% per year no problem and that would spurr growth again. With the high level of government debt you want inflation not deflation. The Bank of Japan is trying its best to introduce inflation by keeping interest rates almost to zero, but if banks don't extend loans to individuals it's bad all around. Individuals can't access money to grow the economy and yet those who have savings receive almost zero interest.

The only ativity from Japanese banks that I am seeing is buying US Treasuries to earn 4% with the deposits on which they only pay consumers 0.05% and hedge the currency exposure. They earn a riskfree rate of return of 3% or so including the cost of the hedge. with that kind of economics no wonder they are not extending loans to individuals with the inherent risk in loan losses.

So if the zero interest rate policy is not helping the economy (it's only helping banks gouge consumers), the Bank of Japan should raise interest rates to close the gap with the dollar and destroy the yen carry trade business. Maybe then, banks will see more benefits in lending out their cash to individuals.

That will have the impact of raising the value of the yen but the economy can handle it if domestic consumption increases to compensate by making loans available to consumers.

[GuyJean]

.. Once money inflation is introduced in the system that will eventualy translate into price inflation which would help everyone. Japan can handle price inflation of up to 5% per year no problem and that would spurr growth again...

As Petrol Prices Push Upward, Papa-sans' Play Purchases Poised to Plummet!
http://mdn.mainichi.jp/culture/waiwai/news/20080119p2g00m0dm002000c.html

.. Now Asahi Geino (1/24) provides yet another nightmarish scenario, foretelling a futile, fun-less future for Japan's hardworking salarymen, who face inflated fees for not only for food, but for frolic and fornication as well.

"Beer prices will be going up 3 to 5 percent, the first rise at the retail level in 18 years," points out economist Haruhiko Sato. "Likewise for Japanese sake (rice wine) and imojochu (sweet potato spirit), as makers in Kyushu have hiked their prices. Prices have even gone up for the hors d'ouvres served with the drinks as well."

The inflationary spiral may spell ruin for the so-called 5,000-yen cabaret clubs that for decades have provided recreation to rank-and-file salarymen on shoestring budgets.

"Police have been cracking down harder on 'kyabakura' (cabaret clubs) that stay open until the wee hours, and more and more clubs have been shutting their doors for good," says Sato. "So the clubs that remain in business are under no competitive pressure. Many think only in terms of short-term profits and have been raising their prices.

"Naturally the rise in oil prices will impact on the sex business," remarks analyst Takashi Kadokura, who for over a decade has specialized in researching Japan's underground economy. "At 'soaplands' and fashion health massage shops, increases in fixed costs like electricity and gas will have to be passed on to customers."..

Fuck! With inflation, I'll have to resort to inflating!

GJ

[Takechanpoo]

how much more punishment are you willing to take?

Needless to say, all of forex reserves in U.S dollar.
Uncle Sam who drived to the criff never allow Japan to release the shit.
If J-government try releasing the shit, someone in J-government will be erased literally or socially.

[Takechanpoo]

So if the zero interest rate policy is not helping the economy (it's only helping banks gouge consumers), the Bank of Japan should raise interest rates to close the gap with the dollar and destroy the yen carry trade business. Maybe then, banks will see more benefits in lending out their cash to individuals.

Deflation have already come back since Fukui Toshihiko who is dog of Uncle Sam and J-largecompanies(Keidanren) raised rates in February 2007.
If Fukui or his successor raise more, stagflation will begin.

[Buraku]

Japan's merchandise trade surplus shrank for the third straight month in May as imports continued to outpace exports due to high crude oil prices and weaker demand in the U.S. and EU, the Ministry of Finance said on Wednesday.

http://www.forbes.com/afxnewslimited/feeds/afx/2008/06/24/afx5150183.html

The finance ministry said overall imports increased 4.4 percent to 6.44 trillion yen in May. Crude oil imports surged 53.4 percent as the average price of the commodity jumped 63.4 percent to a record $107.60 per barrel.

Imports of other commodity products also increased due to rising prices, with imports of coal jumping 47.4 percent and liquefied natural gas up 21.1 percent.

Japan govt to help fishermen pay soaring fuel bills

http://uk.reuters.com/article/oilRpt/idUKT27870120080626


The US slowdown meant demand for Japanese cars and machinery continued to fall, and the trade surplus with the US was down by 11%.

http://news.bbc.co.uk/2/hi/business/7472609.stm

Analysts say Japan, a key exporter, is likely to leave rates unchanged for some time, because of inflationary pressures and the US slowdown.

[nottu]

[nottu]

[Buraku]

Nikkei sinks 11.4 pct in worst loss since '87 crash
http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSTKB00307020081016


Asian Stocks Tumble on Recession Concerns; Nikkei 225 Plunges
http://www.bloomberg.com/apps/news?pid=20601087&sid=aT4Eb5Cdztf0&refer=home
By Patrick Rial and Chua Kong Ho

Oct. 16 (Bloomberg) -- Asian stocks plummeted, driving the MSCI Asia Pacific Index down the most on record, on concern the global economy will sink into a recession and after Standard & Poor's said South Korean banks may fail to refinance debt.

MSCI's Asian index, which comprises the biggest stocks across the region from Australia to Japan, tumbled 8.5 percent to 87.04 at 7:18 p.m. in Tokyo, the largest drop since the measure was compiled in December 1987. Japan's Nikkei 225 Stock Average plunged 11 percent, the steepest loss since the crash of 1987. South Korea's Kospi Index fell 9.4 percent, the most since the 2001 terror attacks, and the won retreated as much as 12 percent.

Falling metal and oil prices dragged BHP Billiton Ltd. down 13 percent and Cnooc Ltd. 8.9 percent lower. While MSCI's Asian index is still up 1.2 percent this week after central bankers around the world announced a $2 trillion global bank rescue, the gauge has lost 45 percent this year as credit markets seized up and economies slowed.

``We're having a U-turn in perception,'' said Mark Konyn, chief executive officer of RCM Asia Pacific Ltd., which oversees $15 billion in Asian assets. ``While remedial measures taken globally have been sufficient to arrest the financial crisis, concerns have quickly shifted to the economy. A synchronized global slowdown threatens a longer and deeper recession.''

Standard & Poor's 500 Index futures gained 0.8 percent, erasing earlier losses after UBS AG said it will raise more than $5 billion from the Swiss government. The S&P tumbled 9.1 percent yesterday, the biggest loss since 1987, after U.S. retail sales fell twice as much as economists estimated.

Sony, Sharp

Concern that U.S. consumers will buy fewer products from Asia drove Sony Corp., the maker of the PlayStation 3 game console, and Sharp Corp. down more than 10 percent. Hong Kong's Hang Seng Index declined 4.8 percent, paring an earlier drop of 8.9 percent, after Air China Ltd. forecast a loss.

Asian benchmark indexes are trading near lows reached last week, when MSCI's Asian gauge fell the most ever on concern the global credit crisis will increase company failures. Markets rebounded earlier this week after the U.S. Treasury said it will invest $250 billion in financial institutions and France, Germany, Spain, the Netherlands and Austria committed $1.8 trillion to guarantee bank loans and take stakes in lenders.

Japan's Prime Minister Taro Aso said today the U.S. bank rescue plan is ``insufficient'' and ``that's why markets are falling.'' Aso was speaking to lawmakers in parliament.

The Nikkei's drop today is the third time the measure has lost more than 9 percent in six trading sessions, and follows a 14 percent jump on Oct. 14.

The Kospi tumbled to its lowest close since June 2006, as S&P said it may cut credit ratings for Kookmin Bank, Woori Bank and five other financial companies. The cost of protecting South Korean debt from default rose.

Won Slumps

KB Financial Group Inc., the holding company for Kookmin Bank, slumped 15 percent to 43,400 won. Woori Finance Holdings Co., which controls Woori Bank, dropped 15 percent to 11,050 won.

The won, Asia's worst-performing currency this year, fell 9.7 percent to 1,373 per dollar at the 3 p.m. stock trading close, Seoul Money Brokerage Services Ltd. said. The currency's 32 percent slump this year threatens to increase the cost of financing dollar-denominated debt.

South Korea's money market rates rose to the highest since January 2001. The benchmark 91-day certificate of deposit rate increased 3 basis points to 6.08 percent, according to the 10:30 a.m. fixing by the Korea Securities Dealers Association.

Other Asian funding costs fell. The rate Australian banks charge each other for three-month loans dropped to 5.695 percent, compared with 7.49 percent on Sept. 19, four days after Lehman Brothers Holdings Inc. filed for bankruptcy. Japanese overnight commercial borrowing rates declined to a one-week low.

Metal, Oil

Commodities prices slumped on concern a global recession will slash demand for raw materials. Copper futures on the London Metal Exchange headed for the biggest two-day decline in more than 12 years. Crude oil fell for a third day, taking its retreat from the July record to more than 50 percent. Crude slid as much as 3.3 percent to $71.21 a barrel recently in New York.

BHP lost 13 percent to A$25.80. Rio Tinto Ltd., the world's third-largest mining company, fell 16 percent to A$66.01. Both plunged the most since October 1987. Rio said yesterday it will idle sections of its highest-cost aluminum plants as prices have slumped amid weakening demand. Cnooc, China's biggest offshore oil producer, slid 8.9 percent to HK$6.12.

``Market players are increasingly nervous that global economies will sink even further,'' Mitsushige Akino, who oversees about $468 million at Tokyo-based Ichiyoshi Investment Management Co., said in an interview with Bloomberg Television.

`Harsh' Outlook

Sony fell 13 percent to 2,320 yen. Sharp, Japan's largest maker of liquid-crystal-display televisions, lost 11 percent to 790 yen. Toyota Motor Corp., the world's second-largest automaker, slumped 9.3 percent to 3,310 yen.

U.S. consumer purchases fell 1.2 percent in September, almost double analysts' estimates. The drop marked the third- straight monthly decline, the first time that's happened since comparable records began in 1992, U.S. Commerce Department figures showed.

``The American spending spree we've seen in the past few years has totally evaporated,'' said Yoshinori Nagano, a Tokyo- based senior strategist at Daiwa Asset Management Co., which manages $96 billion. ``The earnings outlook for auto manufacturers and electronics makers is particularly harsh.''

Samsung Electronics Co., the world's third-largest mobile- phone maker, lost 7.9 percent to 504,000 won. Merrill Lynch & Co. cut its rating on the stock to ``underperform'' from ``buy.''

Lotte Shopping Co., South Korea's biggest department-store chain, plunged 10 percent to 194,000 won after the country's department store sales fell for the first time in nine months in September.

Airlines Drop

Air China, the nation's largest international carrier, plunged 13 percent to HK$2.79, its biggest decline since January, after projecting a nine-month loss. Singapore Airlines Ltd., Asia's most profitable carrier, fell 4 percent to S$12.4 after saying traffic slipped in September, the first drop in more than three years.

The cost of protecting Asia-Pacific bonds from default increased, according to traders of credit-default swaps. The Markit iTraxx Australia index of credit-default swaps rose 27.5 basis points to 225 at 2:28 p.m. in Sydney, Citigroup Inc. data show. The iTraxx Japan climbed 23 basis points to 208, according to Morgan Stanley, and the investment-grade benchmark index for the rest of Asia advanced. Contracts on South Korean sovereign debt approached a record as the won slumped.

``Everybody's just very suspect of trading any emerging market or any name in Asia,'' said Mark McCarthy, a credit trader for ABN Amro Holding NV in Sydney.

Credit-default swaps pay the buyer face value in exchange for the underlying securities, or cash equivalent, if a borrower fails to adhere to its debt agreements.

[wuchan]

The US economy has been shit for a while now. Stock holders panicked when the retail numbers dropped. Um.... duh, people have had trouble paying for gas lately. What do you think will be the first thing they cut out of their budget? FUN MONEY! aka, clothing, music, movies, RETAIL GOODS. It just goes to show the old saying is true "a person is intelligent, people as a group are stupid and panicky"

[Buraku]

http://money.cnn.com


"We saw a lot of people covering shorts yesterday, but we didn't see any conviction buying coming through with it, and you didn't see a huge amount of short-selling. I think people are just very undecided which way these markets go at the moment," he added.

On mainland China, the Shanghai Composite fell as low as 1,703.10, the benchmark's lowest since Sept. 14, 2006, before recovering. The index was recently down 2.7% at 1,713.38.

In Hong Kong, the Hang Seng Index slumped 6.7% to 13,841.63 and the Hang Seng China Enterprises Index lost 8.3% to 6,627.63.

The Nikkei 225 Average ended the morning trading session down 5.7% at 8, 980.18, while the broader Topix index lost 5.3% to 915.84.

The losses came after stocks on Wall Street slumped overnight, erasing strong Election Day gains from the previous session.

Singapore's Straits Times Index dropped 4.8% to 1,779.27 and Taiwan's Taiex shrank 5.1% to 4,724.24.

Australia's S&P/ASX 200 shed 4.1% to 4,158.50 and New Zealand's NZX 50 index gave up 1% to 2,856.16. South Korea's Kospi lost 6.5% to 1,105.24.

"Even as Asia averts a credit crisis, de-leveraging persists, borrowing is more difficult, and 'cash is king'," wrote Merrill Lynch strategists led by Mark Matthews in a note.

"Stocks that should outperform in such an environment are ones that will still have high free cash flow yields, even if their earnings decline sharply. These are companies that will still be able to pay dividends and develop new projects, while others can't," they added.

The report listed Taiwan's Acer Inc. and Chunghwa Telecom Co. (CHT), Hong Kong's China Netcom Group Corp.(CIGUF), Singapore's StarHub (SRHBF), British American Tobacco (Malaysia), India's Hindustan Unilever and Philippine Long Distance Telephone Co. (PHI) among Asian companies with high free cash flow yields.

Exporters were hit hard in Tokyo on the yen's strength against the U.S. dollar, with Canon (CAJ) slumping 10.6% and Toyota Motor Corp. (TM) sliding 6.1% , while Sharp Corp. (SHCAY) lost 8%.

In currency trading, the U.S. dollar bought 98.03 yen, compared with 99.40 yen late Wednesday.

In Seoul, shares of Samsung Electronics Co. (SSNLF) lost 2.5% and steelmaker Posco (PKX) skidded 7.1%.

Shares of Cathay Pacific Airways (CPCAY) slumped 12.6% in Hong Kong a day after the airline warned that 2008 financial results would be "disappointing" because of fuel hedging losses and lower revenue.

Other notable losers included coal miner and power producer

Resource stocks declined on a steep fall in crude-oil prices overnight, with BHP (BHP) losing 7% and Woodside Petroleum (WOPEY) sliding 6.3% in Sydney, while Inpex Corp. lost 8% in Tokyo.

Shares of Resona Holdings Inc. (RSNHY) slid 4% in Tokyo, after the Nikkei business daily reported the company plans to integrate Resona Bank and Resona Trust & Banking Co. as early as spring, to benefit from the synergies.

In Sydney, shares of Telstra Corp. (TLSYY) were unchanged in a weak market, after the telecommunications major reiterated its fiscal 2009 forecast.

December crude-oil futures slipped one cent to $65.29 a barrel in electronic trading recently, after dropping $5.23 to $65.30 a barrel Wednesday on the New York Mercantile Exchange.

On Wall Street, the Dow Jones Industrial Average (DJI) slumped 5.1% to 9, 139.27, as investors worried about the task ahead for President-elect Barack Obama in dealing with the poor shape of the U.S. economy. The S&P 500 index ( SPX) sank 5.3% to 952.77, while the Nasdaq Composite (RIXF) shrank 5.5% to 1, 681.64.