Whining American businessmen

[Jack]

I could not paste a link but I copied a Reuters story regarding GM and other American car makers accusing that Japan is manipulating its currency. Talk about fucking whiners. How about making good solid cars like the Japanese instead of whining?

WASHINGTON, Nov 14 (Reuters) - The chief executive of
hard-pressed automaker General Motors Corp. charged on Tuesday
that Japan "systematically" undervalues its yen currency and
said U.S. producers raised the issue directly with President
George W. Bush.
Rick Wagoner, speaking to reporters on the White House
driveway after he and fellow chieftains from Detroit's Big
Three automakers met with Bush, said he did not think the
president fully agreed that Japan was manipulating its
currency's value.
Wagoner said the automakers share a "strong conviction that
the Japanese yen is systematically undervalued, which helps
them to maintain significant trade balance surpluses in our
industry."
He added: "I can't honestly say that it appeared the
president 100 percent saw it that way."
The dollar fell against the yen <JPY=> to 117.46 yen, down
nearly 0.6 percent on the day, from about 117.67 before the
automakers' comments. The yen had already strengthened earlier
in the day after quarterly Japanese economic growth figures
beat expectations.
Bush said after the meeting that he wanted to work with the
automakers to make sure the industry remains "as vibrant and
solid" as possible.
Japanese brands, many of which are assembled in the United
States, have been making steady inroads into U.S. markets and
taking sales away from domestic brands on a popular perception
that they offer higher reliability at competitive prices.
The U.S. automakers claim that Japan's yen is kept
artificially low so that the effect is to provide a subsidy
between $3,000 and $9,000 per vehicle for Japanese cars.
(Additional reporting by Amanda Cooper in New York and John
Crawley in Washington)
((Reporting by Glenn Somerville, editing by Chizu Nomiyama;
Reuters Messaging: glenn.somerville.reuters.com@reuters.net,
e-mail: glenn.somerville@reuters.com; Tel: 202 898 8377))
Keywords: BUSH AUTOS YEN

[Buraku]

It's a well known fact that Japan is even worse than the Chicoms when it comes to currency manipulation

[Charles]

..fucking whiners.

[Greji]

Hey, Dems are in. Gotta pay back them labor unions for election promises. Might see some more bashing beginning in other sectors as well.

[Jack]

It's a well known fact that Japan is even worse than the Chicoms when it comes to currency manipulation

How is this well known. Japan is the world's second largest economy do you think it's as easy as that to manipulate a huge currency like the yen? I don't think so. You may argue that Japanese interest rates are artificially low but when you consider the state of the economy I don't think you can say interest rates are being kept low to weaken the yen so that exports rise. I think the American car makers are just whining because no one wants to buy their fucking cars. Toyota is about to surpass GM as the largest carmaker and of course the GM fuckers need a scapegoat to excuse their incompetence.

[Charles]

Hey, Dems are in. Gotta pay back them labor unions for election promises. Might see some more bashing beginning in other sectors as well.

Umm.. you missed the point completely. That was aimed at Jack's continual whining.

[Mulboyne]

The BoJ hasn't intervened in the currency market since March 16, 2004, when the yen was trading at about 108.60 to the dollar.

[Kuang_Grade]

This piece also ignores that an increasing number of "japanese" cars are made/assembled in the US. While high ticket items such as engines are still made in Japan, increasingly more and more of the other items are being sourced in the US and from other places. At the same time, US automakers are more and more saying to US suppliers 'match the price I can get from China, or fuck off' (http://english.people.com.cn/200610/27/eng20061027_315632.html) while at the same time US manufactures have fiddled with % of US made parts in some of their low gas mileage cars in order for them to be classified as 'imports' (despite being made in the US) for CAFE (fuel efficiency) standards. http://www.nhtsa.gov/cars/rules/CAFE/overview.htm.

My last car was about 80% US made parts and was made by GM...it lost approximately 70% of its initial value in 4 years despite no problems, no damage and only 22K miles.
My current car is about 50% US made parts and was made in the US by a J company...It is about three years old and its only lost around 30% of its initial value so far.
What do you think the odds are that I'll ever buy another car from one of the Big 3?

[Greji]

Umm.. you missed the point completely. That was aimed at Jack's continual whining.

Hmm, am I to take it that Jack bashing is now officially in?

[D.]

Every once in a while, I see a post that I just gotta respond to. Might as well get used to it since my wife and I are moving back to Japan in 2007 and this is the best place to go for a soon to be FG. Anyway, Detroit does need to compete better (there's a reason both the cars in our household are made by Toyota, but it isn't price), but holding down the value of the yen is effectively official policy . Specifically the Ministry of Finance has spent a lot of money to keep the yen from appreciating and they make no bones about it. It is no accident that Japan has the second highest foreign-reserves in the world at $828.8 billion. For those of you wanting a source (see this report from the Bank of International Settlements at http://www.bis.org/publ/arpdf/ar2006e5.pdf

The government has not massively intervened in the Forex market since 2004, but from '02 through '03, the government spent many, many billions of dollars to keep the yen from appreciating. Most observers consider the yen to be hugely undervalued, but that's goods news for anybody working in Japan who expects to send money home next year.

[Mulboyne]

The government has not massively intervened in the Forex market since 2004

Not only have they not "massively intervened", they haven't intervened at all since March 16, 2004.

Specifically the Ministry of Finance has spent a lot of money to keep the yen from appreciating and they make no bones about it.

They would take issue with you immediately. Currency intervention is the responsibility of the Bank of Japan.

[Greji]

Not only have they not "massively intervened", they haven't intervened at all since March 16, 2004.
They would take issue with you immediately. Currency intervention is the responsibility of the Bank of Japan.

[Catoneinutica]

While the Bank of Japan hasn't officially intervened in the currency market since 2004, they've certainly done nothing to discourage the carry trade by keeping rates in Japan at or near zero, despite tatemae statements about potential future increases. One gets the impression that Japan, Korea, and China are keeping a weather eye on each others valuations, and wouldn't hesitate to start competitive devaluations if it came to that.

The yen being so cheap as to require more than 150 of them to buy one Euro is really quite astonishing. As I've mentioned before, it's really rather pathetic that Japan has never moved beyond the factories-for-export model, and now it's facing a huge competitor that can utterly decimate it at the manufacturing game.

[Jack]

While the Bank of Japan hasn't officially intervened in the currency market since 2004, they've certainly done nothing to discourage the carry trade by keeping rates in Japan at or near zero, despite tatemae statements about potential future increases. One gets the impression that Japan, Korea, and China are keeping a weather eye on each others valuations, and wouldn't hesitate to start competitive devaluations if it came to that.

The yen market is way too big for the government to intervene. The Bank of Japan may from time to time try to smooth the wild fluctuations in the currency but hasn't done so in many years. The way to keep the yen down is by leaving interest rates low and you will agree that the Japanese economy being in a precarious position no one wants to risk damaging it by rtaising rates. The free market determines exchange rates in Japan.

Plus, this thread was about whining American businesses, the so-called not-so-free market of the U.S. of A.

[D.]

What? Spending a few trillion yen is not massive intervention? The 20 trillion yen spent buying USD in Jan. & Feb. 2004, a piffling amount. I would have to disagree. The fact that the gov. hasn't spent as much since 2004 means they no longer intervene? (See this speech by Alan Greenspan in March 2004 for the expert's perspective (www.federalreserve.gov/BOARDDOCS/Speech ... efault.htm[/url]) The fact that Japan had
USD 650 billion in reserves as of Dec. 2003 which grew to USD 829 billion in two years is simply..um the result of great investment.

Also for the record, "In Japan, the Minister of Finance is legally authorized to conduct intervention as a means to achieve foreign exchange rate stability. The Bank of Japan, as the agent of the Minister of Finance, executes foreign exchange intervention operations in accordance with the directions of the Minister of Finance."(See http://www.boj.or.jp/en/type/exp/faqkainy.htm) So unless something has changed of late, MOF still calls the dance.

Finally, Jack..Japan didn't spell billions in the Forex market because it has no influence on the market. Just because they are not intervening heavily doesn't mean they're not "smoothing" the exchange rate. This is now the second longest economic expansion in post-war Japan. Sooner or later the the yen will rise. At least I hope so. The current situation is not sustainable for the U.S. or Japan or China.

Sorry if I distracted from the over-all thread, whining American businesses, just thought some of the bitching had a point.

[Catoneinutica]

The yen market is way too big for the government to intervene.

Well, this is the conventional wisdom, isn't it. I've certainly always believed it. However, as I posted over in the venerable "What's up with the value of the Yen?" thread:

BEGIN QUOTE

Good Bloomberg column by Bill Pesek:

http://www.bloomberg.com/apps/news?p...asGhP0 CYr0E4

Interesting little quote:

"There's no evidence the Ministry of Finance has been working to weaken the yen, as it did with great success in 2004."

END QUOTE

A 1998-style spike in the value of the yen would snap the neck of the yen-carry trade and leave a lot of pretty nasty "broken arbs", as the boys say. It's probably within the power of the BOJ to engineer such a spike, but one gets the impression they're too busy watching the yuan and won and getting ready to do some good ol' fashioned neighbor-beggaring.

Edit: should've linked to the other thread:
http://www.fuckedgaijin.com/forums/showthread.php?t=4617&page=19&highlight=pesek

[Mulboyne]

Don't worry, D., your posts are definitely on topic. Whether the businessmen are whining or not is a distinction worth making.

...unless something has changed of late, MOF still calls the dance

To see the BoJ as a rubber stamp for decisions made by MoF is to ignore decades of inter-agency rivalry and the tendency for the central bank to act, as one insider put it "like the Kwantung Army from the 1930s: that is, they act independently, just as the Kwantung Army in China acted independently of the Japanese military headquarters and the civil government." Legally, MoF controls the entire budget of the Bank of Japan. In practice, this means little. You cite Alan Greenspan as an expert and it is worth pointing out that he was a central banker himself, not the Treasury Secretary. Insofar as comparisons can be made between the two systems, his counterpart is the BoJ Governor. MoF cannot easily intervene if the BoJ does not want them to - ultimately, the Bank can counter by tightening credit. To simplify the differences between them, BoJ regards the MoF as fiscally irresponsible, dangerously inclined to unleash destructive inflation to suit the demands of their political masters. MoF sees the bank as unelected, unaccountable and willing to put the nation's interests at risk for the sake of a monetary philosophy with an unknowable or unattainable goal. Both agencies believe they know best where currency exchange rates should be. That's not to say that MoF always favours intervention and the BoJ is always opposed but n the ongoing struggle between the two, the Bank currently has the upper hand. They are calling this dance.

[Western All Stars]

Speaking of US automakers, did anyone see the recent Chevrolet commercial, "Our Country. Our Truck"? I guess the original one was even worse, with 9/11 and atomic bomb images.

Basically the US automakers strategy is to evoke patriotism and shame customers into buying theirs. The funny part is most of Japanese cars sold in the US are assembled in US anyway.

blog about it here

btw I can't find this on youtube or gvideo. wonder if the company pulled it off somehow.