Fucked PM AssHole!

[IkemenTommy]

Posting while stoned leads to posts that don't make a whole lot of sense to us non-stoners.

I'm sure there is no shortage of political philosophies with consequences that are difficult to predict prior to implementation. The DPJ's continuous string of blunders are not being caused by any one philosophy though, they just have the unfortunate habit of putting their mouths into high gear while leaving their brains in neutral. Worse, they are doing this when discussing topics that have a huge impact on the economy and country.

And you are trying to lecture something profoundly meaningful to a stoner.

[FG Lurker]

And you are trying to lecture something profoundly meaningful to a stoner.

Good point. Lost cause.

[American Oyaji]

Posting while stoned leads to posts that don't make a whole lot of sense to us non-stoners.

I'm sure there is no shortage of political philosophies with consequences that are difficult to predict prior to implementation. The DPJ's continuous string of blunders are not being caused by any one philosophy though, they just have the unfortunate habit of putting their mouths into high gear while leaving their brains in neutral. Worse, they are doing this when discussing topics that have a huge impact on the economy and country.

Good point.

And who's the stoner?

[FG Lurker]

And who's the stoner?

If you weren't stoned when you wrote your previous post then I'm not sure what the explanation is...

[American Oyaji]

If you weren't stoned when you wrote your previous post then I'm not sure what the explanation is...

Tired, but not stoned.

I dunno. Seemed quite clear to me.

DPJ have philosophies and theories about governance that they haven't been able to try out due to LDP dominance. Now that they have control, they are testing their theories. However, with scientific theory, it is easier to predict the outcome under a controlled lab environment.

With political theory, there are too many people involved that can introduce random elements into the experiment, so it's unpredictable, so the only way to test a theory is to put it into practice and see what shakes out.

The problem I see is that the theories that the DPJ are putting into practice are counter productive because they are trying them all at the same time and also because they are most likely political models that were expounded during simpler times and the theories are no longer relevant. Also, the current crop of politicians just have no experience on thinking outside the box or creatively or on their feet in the political arena.

That was what I was trying to say.

[FG Lurker]

DPJ have philosophies and theories about governance that they haven't been able to try out due to LDP dominance. Now that they have control, they are testing their theories.

The DPJ's main theory seems to have been, "Make unrealistic promises to the masses to get ourselves elected."

However, with scientific theory, it is easier to predict the outcome under a controlled lab environment.

With political theory, there are too many people involved that can introduce random elements into the experiment, so it's unpredictable, so the only way to test a theory is to put it into practice and see what shakes out.

Well, yes, and no. If you have a complicated economic theory then this is true.

The blunders the DPJ is making are just that, blunders. It doesn't take a rocket scientist to understand what will happen when the government says that a strong yen would be good for Japan, that they have no plans to intervene in the markets, and that they are not pro-weak yen. Likewise, when the government essentially states that they won't prop up a major corporation (JAL) that is teetering on the edge of failure, the results are not difficult to guess

The comments regarding loan repayments may be slightly more difficult for the average voter to understand but they aren't really that tough.

Finally, many of the DPJ's promises are going to be very, very expensive and Japan is already running massive deficits every year. Although stimulus is probably still required to keep the economy afloat, making long term commitments that will increase spending is not sustainable.

I just hope the blunders keep happening. I'm not sure when the next upper house election is but probably 2 years out or so? If the blunders keep coming we may yet see a bit of balance in the Japanese government. I can hope, anyway.

[canman]

Sorry FGL but the LDP has demonstrated that the Upper House is basically just a roadblock when it comes to pushing through your agenda. Remember with the majority they have in the lower house, the DPJ, just has to wait 30 days after the upper house votes against their bill, and then they can railroad it through. You know some of those oldies but goodies, like the refueling of the US navy, even though it contravened the constitution. Or the gasoline hike, so they could keep helping their buddies in the construction ministry. Or my personal favorite, the bill to force all foreigners to be finger printed and have us join the national health insurance system. Remember those all passed thanks to our good friends from the LDP.
Listen give the DPJ a break, two weeks in and yes they have made some mistakes, but its nothing that cannot be fixed. The LDP had a long time to screw things up, so I am willing to give the DPJ a little longer on the honeymoon.

[FG Lurker]

Sorry FGL but the LDP has demonstrated that the Upper House is basically just a roadblock when it comes to pushing through your agenda.

I'm aware that it would be mostly symbolic. The DPJ is very new though, if they lost the upper house so soon after their lower house win it might give them a bit of pause before fucking things up too badly.

You know some of those oldies but goodies, like the refueling of the US navy, even though it contravened the constitution.

I honestly don't know all the ins and outs of Japanese constitutional law but I didn't think it was such a clear cut "against the constitution" thing. My understanding is that people felt it might go against the spirit of the constitution (not directly self defense) but that it didn't violate it either (not directly attacking someone).

Or the gasoline hike, so they could keep helping their buddies in the construction ministry.

That wasn't a hike, that was reinstating an existing tax. This is the same BS as the tolls. Road maintenance has to be paid for somehow. If it isn't a user-pay system then it just comes out of increased general taxes. I agree that things could and should be made more efficient but they still won't be free. Even through I drive more than most Japanese and far more than the average gaijin I think a user-pay system is much better than paying for everything from general revenue.

Or my personal favorite, the bill to force all foreigners to be finger printed and have us join the national health insurance system.

I wasn't aware that this was pushed through this way, but I'll take your word for it.

The fingerprinting is ridiculous and likely ineffective. Do the DPJ have plans to remove it? Will they destroy the data already on file? Or were they only against it because they were in opposition but now that they're in power they aren't going to do anything about it?

The requirement for national health is a good thing. My only real question about this new law is, "Why wasn't this done sooner!?"

Remember those all passed thanks to our good friends from the LDP.

The LDP are no friends of mine, but the DPJ is (as expected) turning out to have no idea wtf they are doing. Learning on the job is fine for McDonalds but personally I expect a bit more from the government of the world's second largest economy.

Listen give the DPJ a break, two weeks in and yes they have made some mistakes, but its nothing that cannot be fixed.

Well, that remains yet to be seen, doesn't it.

In early August it started to look quite clear that the DPJ was going to win the lower house election and form the next Japanese government. At this time foreign news outlets started to pay more attention to the DPJ's potential policies and how they would differ from the LDP. Here is an August 7th Forbes piece that has Kohei Otsuka ("a vice finance spokesman for the Democratic Party of Japan") saying, "Japan's currency policy should be aimed at maintaining market stability, not at driving down the yen to boost exports, which matches Tokyo's current currency policy." On August 7th the yen peaked at 97.77. It is at 88.72 as I write this. Was that crazy 9 yen (10%) increase caused totally by DPJ rhetoric? No, of course there were other factors as well. Did the DPJ rhetoric play a significant role in it? Yes.

The strong yen is killing manufacturers here and making deflation worse. This will slow down or maybe even reverse the marginal recovery that has started.

The LDP had a long time to screw things up, so I am willing to give the DPJ a little longer on the honeymoon.

We don't have the luxury of time with the current economic situation. I don't know about you but I don't wish to remain stuck in the current situation for another 6 to 12 months (or longer) while the DPJ "figures things out."

[omae mona]

On August 7th the yen peaked at 97.77. It is at 88.72 as I write this. Was that crazy 9 yen (10%) increase caused totally by DPJ rhetoric? No, of course there were other factors as well. Did the DPJ rhetoric play a significant role in it? Yes.

FGL, I don't disagree that the DPJ had some role. Others here are more qualified than I am to tie the yen's movement to politics and other macroeconomic factors. But I do think you are cherrypicking your data. Remember, we hit 87.24 last December right in the middle of LDP rule. So this is not only a DPJ phenomenon. The average rate since Hatoyama took office is about 90.3. The average for the 3 weeks before that was 92.6. Yes, a 2.3 yen move is significant but not nearly as big as you are making it look by comparing 97.77 to 88.72.

[FG Lurker]

FGL, I don't disagree that the DPJ had some role. Others here are more qualified than I am to tie the yen's movement to politics and other macroeconomic factors.

Actually, I went back to see when I could first find a large story discussing the DPJ and their thoughts about a strong(er) yen. It was August 7th, right around when people started to listen to what they were saying. Then I looked at forex charts to see where the yen was then. There was no cherrypicking involved.

Certainly there are other factors at play in the markets (I've posted about them) but the DPJ's consistent statements (over 6~7 weeks) that they weren't against a strong yen and that they even thought it might be good for Japan, played a significant role in the yen's rise back to 90ish levels. The most recent breakthrough of the physiological "90yen barrier" was extremely heavily influenced by DPJ comments.

Remember, we hit 87.24 last December right in the middle of LDP rule.

There were very specific and well understood reasons why that happened. It happened when the market panic was in full swing and all the yen-funded carry trades were being unwound. As they unwound the yen gained strength rapidly which in turn caused more unwinding and more strength. It bounced below 90 and then reversed in great part because traders felt that 90yen was too strong and that the Japanese government would not accept such a strong currency.

The average rate since Hatoyama took office is about 90.3. The average for the 3 weeks before that was 92.6. Yes, a 2.3 yen move is significant but not nearly as big as you are making it look by comparing 97.77 to 88.72.

It's not as big because I went back further, to where the DPJ first started talking up the yen. Or more to the point, to where the western press started listening to them talk up the yen. The more they talked, the more the yen rose.

There is a saying in trading, "The trend is your friend." As long as it looks like a trend will continue more and more traders will jump on it, pushing the trend further. With the incoming Japanese government essentially cheering traders on it is no surprise that the yen continued to gain strength.

The DPJ has now flip-flopped and started talking about intervention. The problem is that after talking the yen up for weeks a lot of people don't believe the government is actually serious about their intervention threats. The funny thing is that if the DPJ had said nothing about a strong yen and made minor murmurs about potential intervention then the likelihood of actually needing to intervene would be much less. Now there is a decent chance that they will have to intervene before anyone will take them seriously again!

[FG Lurker]

Finance Ministry: Gov't to issue extra bonds to make up for tax shortfall
Mainichi Daily News, October 17, 2009

The government will be issuing extra bonds this fiscal year to make up for a shortfall in tax revenue, a senior Finance Ministry official said.

Senior Vice Finance Minister Yoshihiko Noda told a news conference on Friday that tax revenues for the current fiscal year, initially estimated at more than 46.1 trillion yen, may fall below the 40 trillion yen level.

"It's inevitable that the government will issue additional bonds," he said.

Over 44.1 trillion yen in bonds have been issued so far in fiscal 2009. That figure could creep up to over 50 trillion yen, which would make this year the first in which bond revenue has exceeded that from taxes since the end of World War II.

(Original Article)

When your deficit exceeds your revenues the balance is no longer called a "shortfall"...

I realize the DPJ didn't create the budget that calls for these bonds but the budget for next year looks if anything to be even larger than the one for this year.

Balancing Japan's budget is going to be a very painful experience but the alternative is going to be an economic disaster. I wish the DPJ had the balls to do this but sadly they don't. I wonder how long Japan has left?

[james]

Balancing Japan's budget is going to be a very painful experience but the alternative is going to be an economic disaster. I wish the DPJ had the balls to do this but sadly they don't. I wonder how long Japan has left?

pshaw, what's a 200% debt to gdp ratio between friends eh? to put it into perspective, japan is second only to zimbabwe in terms of public debt. list here.

[FG Lurker]

pshaw, what's a 200% debt to gdp ratio between friends eh? to put it into perspective, japan is second only to zimbabwe in terms of public debt. list here.

Grrrrrrreat, we live in the Zimbabwe of Asia. At least we can all look forward to our One Hundred Trillion Yen notes!

[FG Lurker]

Hatoyama says opposition leader 'not qualified to criticize' in fiery Diet debate
Mainichi Daily News, October 29, 2009

Prime Minister Yukio Hatoyama said the leader of the opposition Liberal Democratic Party (LDP) Sadakazu Tanigaki is "not qualified to criticize" his party during a fiery House of Representatives plenary session on Wednesday.

[...]

In his question about Hatoyama's policy speech, LDP leader Tanigaki bitterly criticized the DPJ's manifesto as being a "deceptive advertisement."

Moreover, Tanigaki, who previously served as finance minister and places priority on balancing the debt-ridden budget, described budgetary requests filed by government ministries and agencies as "pork-barrel spending."

The outraged prime minister responded strongly: "You're not qualified to criticize us! Frankly speaking, who's responsible for the current fiscal situation?" he said in reference to the huge budget deficit accumulated under the LDP-led administration.

[...]

When grilled over the government's failure to make a prompt decision on the relocation of U.S. Marine Corps Air Station Futenma in Okinawa Prefecture, Hatoyama said, "Who failed to draw a conclusion on the issue for over a decade?"

(Full Story)

While the DPJ has a point that the present debt was created on the LDP's watch they do not seem to be doing anything to address the situation. Instead they are continuing to spend like drunken sailors and will make the problem much, much worse.

Blaming the LDP also reminded me of an old joke:

A fellow had just been hired as the new CEO of a large corporation. The CEO who was stepping down met with him privately and presented him with three numbered envelopes. "Open these if you run up against a problem you dont think you can solve," he said.

Well, things went along pretty smoothly, but six months later, sales took a downturn and he was really catching a lot of heat. About at his wits end, he remembered the envelopes. He went to his drawer and took out the first envelope. The message read, "Blame your predecessor." The new CEO called a press conference and tactfully laid the blame at the feet of the previous CEO. Satisfied with his comments, the press -- and Wall Street -- responded positively, sales began to pick up and the problem was soon behind him.

About a year later, the company was again experiencing a dip in sales, combined with serious product problems. Having learned from his previous experience, the CEO quickly opened the second envelope. The message read, "Reorganize." This he did, and the company quickly rebounded.

After several consecutive profitable quarters, the company once again fell on difficult times. The CEO went to his office, closed the door and opened the third envelope. The message said, "Prepare three envelopes."

[Doctor Stop]

Quit whining. It's not a strong yen, it's a weak dollar.

[FG Lurker]

Quit whining. It's not a strong yen, it's a weak dollar.

Would be helpful to know who or what you're replying to...

No matter how you look at it though, Japan is fucked.

(Congrats on your Yokozuna status btw! )

[FG Lurker]

Japan PM ratings slip, voters worry about debt
Reuters, November 9, 2009

Support for Japan's new government slipped eight points to 63 percent, while 85 percent of voters said they would rather see some campaign promises broken than a rise in the country's already huge debt, a survey showed on Tuesday.

[...]

The Nov. 6-8 survey by the mass circulation Yomiuri newspaper showed 55 percent of the 1,074 voters responding were not convinced that Hatoyama was keeping his pledge to put control of policies in the hands of politicians rather than [bureaucrats].

Asked about a plan to relocate a U.S. Marine base on Japan's southern Okinawa island, a feud over which has strained ties with ally Washington ahead of President Barack Obama's visit this week, 63 percent said Japan should implement the agreement as planned or with minor changes, the newspaper said.

(Full Story)

The DPJ got in because of a protest vote against the LDP. It looks like the public is slowly waking up to discover exactly what a mess they have created...

[FG Lurker]

Japan Faces Fear of New Downturn
The Wall Street Journal, November 14, 2009

Japan's new government faces a dilemma in trying to prevent a double-dip recession, with recent stimulus efforts due to wane, debt soaring and the economy likely to begin losing steam by early next year.

Talk of new stimulus measures to respark the growth is pushing up long-term interest rates, threatening to limit any impact of fresh spending. That, in turn, is forcing officials to look for cuts to offset any new expenditures -- moves that could undermine a recovery in demand, economists warn.

Two months after Prime Minister Yukio Hatoyama's Democratic Party of Japan swept to power amid promises of an economic revival, investors are growing nervous about his administration's economic policies.

Their concerns center on rapidly deteriorating fiscal conditions -- a burden the DPJ inherited from the previous government, but are expected to get worse because of the party's own expensive social welfare policies.

At 172% of gross domestic product in 2008, Japan's government debt is by far the largest among rich nations. Masaaki Kanno, a J.P. Morgan Chase economist, estimates the ratio could reach 200% next year and 300% over the next decade. Rising social-security costs and the weak economy are primary reasons for such an increase.

(Full Story)

Three HUNDRED percent!??!!?

Japan is fucked.

[Taka-Okami]

Japan Faces Fear of New Downturn
The Wall Street Journal, November 14, 2009

Three HUNDRED percent!??!!?

Japan is fucked.

No where in industrialized countries is it safe. Either there is massive public debt, private debt or both in these places. There needs to be a Jubilee (I doubt this will happen) or massive inflation to get the debt burden down. The current deflationary spiral only makes the debt burden more severe.

Currently the US $ is becoming the knew 'carry trade' currency since they are basically paying people to borrow their money, this is creating one of the biggest asset bubbles of all time (especially in 'risky' assests). The so called rally in the stock market is an illusion. As soon as the US start raising interest rates, kaboom!

Liquidate - get your cash into some asset(s) that will hold its value in the coming times of trouble. I am currently trying to get out the 'realestate ponize scheme' where I come from (Oz).

Things dont look good.

[FG Lurker]

Currently the US $ is becoming the knew 'carry trade' currency since they are basically paying people to borrow their money, this is creating one of the biggest asset bubbles of all time (especially in 'risky' assests). The so called rally in the stock market is an illusion. As soon as the US start raising interest rates, kaboom!

I'm not too worried about this. When the US Fed raises rates investors and speculators will again turn to the yen to fund their trades. The dollar will strengthen and the yen will weaken. I don't see any big kaboom from it though.

[Taka-Okami]

I'm not too worried about this. When the US Fed raises rates investors and speculators will again turn to the yen to fund their trades. The dollar will strengthen and the yen will weaken. I don't see any big kaboom from it though.

How can the dollar strengthen when they a printing MASSIVE amounts of dollars? It is slowly being removed as the worlds reserve currency. I cant see the dollar getting stronger in the forseeable future. Once the US treasurery bond market bubble bursts you'll see a lot more problems. Talk about a double dip resession/depression anyone?

[FG Lurker]

How can the dollar strengthen when they a printing MASSIVE amounts of dollars?

Because everything is relative. Look at Japan and look at the US. From a standpoint of economic fundamentals and medium-long term economic prospects, do you honestly think the yen should be stronger than the dollar?

It is slowly being removed as the worlds reserve currency.

And what do you expect to replace the dollar? There isn't anything. The US still has the world's largest economy by far and that isn't changing any time soon. Even if some years down the road an international basket of currencies is used to "replace" the dollar it will still be heavily dependent on the US$ as that is what will make up a large chunk of whatever basket is created.

Before some other currency can replace the US$ as the world standard some other economy will need to seriously outstrip the US in economic power. That isn't going to happen any time soon.

[FG Lurker]

When 'Revolution' Turns To Despair
Newsweek, January 15, 2010

Swept into office by an unpopular liberal Democratic Party (LDP), aided by the self-serving calculations of party defector Ichiro Ozawa, an inexperienced idealist at the helm hoists the reform banner onto Japan. Almost immediately the new prime minister's ragtag coalition is greeted by enthusiastic media attention abroad and unprecedented cabinet approval at home. Over and over again, one word is heard: "Revolution!"

Yet what starts as irrational exuberance degenerates into hopeless despair. The premier finds himself entangled in yet another campaign-financing scandal. Cabinet approval plummets. Interparty bickering ensues as the cabinet's agenda is bogged down by protracted ministerial discussions, regulatory uncertainties, and budget constraints. A demoralized premier, now beleaguered by an unsympathetic Japanese media, an impatient public, and a stalled legislative agenda, resigns in humiliation. So begins the long road to LDP rehabilitation.

No, we are not talking about the current coalition government led by Yukio Hatoyama's Democratic Party of Japan (DPJ)--though, let's face it, the parallels are striking. We are talking about Hosokawa Syndrome, so named after the former prime minister whose impractical love of abstract ideas both made and broke a government.

The rapid rise and fall of Morihiro Hosokawa's coalition government in 1993--the first non-LDP government since 1955--marked a missed opportunity in Japan's postwar history. Barely lasting a year, the Hosokawa cabinet was heralded as historic, but left behind an anticlimactic legacy.

Will history repeat itself in 2010? The evidence increasingly suggests an encore performance.

(Full Story)

[wuchan]

When 'Revolution' Turns To Despair
Newsweek, January 15, 2010

Since I landed here for the first time ten or so years ago, I have always believed that the j-government is nothing more than a big show for the people and the real people in power in j-land will never be held accountable for anything.

[Ketou]

Since I landed here for the first time ten or so years ago, I have always believed that the j-government is nothing more than a big show for the people and the real people in power in j-land will never be held accountable for anything.

How does that differ from the rest of the world?

[FG Lurker]

The DPJ seems to have reneged on most (all?) the promises they made to get elected. We're now left with what appears to be a very inexperienced and completely ineffective version of the LDP "running" the country. (Not that the LDP was particularly effective themselves...)

I'm wondering how all the DPJ supporters are feeling these days?

[Screwed-down Hairdo]

Sorry to be cynical, but I don't understand how anybody thought the DPJ could ever have been different in the first place...they are nearly all LDP cast-offs and largely the same dynasties that have run the cuntry for most of the time since the Meiji Restoration.
Mind you, considering what happened during the almost 20 years when this oligarchy's power was usurped, maybe that's a better idea anyway. The more Japan "changes," the more it stays the same.
I guess the point I'm trying to make is that changing dicks in the middle of being screwed can often have unfortunate implications.