1% Growth! Please to Obey Abenomics Rule!

[Coligny]

Could we have Bernie ?

[Wage Slave]

I think he may be reserved for another race - How about Hilary? That would be amusing.

[wagyl]

How about Hilary? That would be amusing.

I would say Hilarious!

[Russell]

How about Hilary? That would be amusing.

I would say Hilarious!

I see what you did there...

[Wage Slave]

There are times I am very slow.

[Takechanpoo]

that MacArthur-like gaijin reformer will work only after economic default.
why j-ppl hate and dont accept concentration of power appropriate to change society drastically is that they never have faced a crisis of the race extinction for good or evil. i do hope that after china economy collapse, desperate chinese army invade japan and kill a certain amount of j-naitonals.
and j-ppl will seriously seek for a powerful savior.

[legion]

that MacArthur-like gaijin reformer will work only after economic default.
why j-ppl hate and dont accept concentration of power appropriate to change society drastically is that they never have faced a crisis of the race extinction for good or evil. i do hope that after china economy collapse, desperate chinese army invade japan and kill a certain amount of j-naitonals.
and j-ppl will seriously seek for a powerful savior.

why would they invade Japan?

No resources to speak of, not enough land to grow enough food, hot and sticky in summer, fucking cold in winter, it's either fucking steep mountain and dense wood, soggy fucking silt plane, or Saitama, a national diet of foraged weeds, fish with their heads on, mercury filled whale meat and irradiated sticky rice, and only one type of beer made by several types of company

China's economy collapses they'd be better off heading to Siberia which global warming will turn into an earthly paradise.

[Russell]

that MacArthur-like gaijin reformer will work only after economic default.
why j-ppl hate and dont accept concentration of power appropriate to change society drastically is that they never have faced a crisis of the race extinction for good or evil. i do hope that after china economy collapse, desperate chinese army invade japan and kill a certain amount of j-naitonals.
and j-ppl will seriously seek for a powerful savior.

why would they invade Japan?

No resources to speak of, not enough land to grow enough food, hot and sticky in summer, fucking cold in winter, it's either fucking steep mountain and dense wood, soggy fucking silt plane, or Saitama, a national diet of foraged weeds, fish with their heads on, mercury filled whale meat and irradiated sticky rice, and only one type of beer made by several types of company

China's economy collapses they'd be better off heading to Siberia which global warming will turn into an earthly paradise.

But Japan has islands...

[legion]

That give you the right to kill dolphins!

[Mike Oxlong]

[Samurai_Jerk]

fucking cold in winter

Only in the north .... and inside everywhere else.

[Grumpy Gramps]

If China wanted Japan, China would have taken Japan already. I don't think they are interested. Here is nothing.

[Samurai_Jerk]

If China wanted Japan, China would have taken Japan already.

I'm sure the US wouldn't have anything to say about that if they tried.

[Coligny]

If China wanted Japan, China would have taken Japan already.

I'm the US wouldn't have anything to say about that if they tried.

They are not even trying with Taiwan...

One thing to put a flag on an empty sand bank...

It's another to takeover a country with millions of illiterate morons who can't find their asses with 2 hands and a flashlight. The country offers jack-shit... it would be like if China had to accept 120 millions refugees overnight...

France was invaded all the time because of the country gigantic natural ressources and central position. Aside for antibiotics resistant clap... japan don't have much...

For the US.... japan is just a big beached aircraft carrier... nicely placed to piss of the Soviets...

[Takechanpoo]

that MacArthur-like gaijin reformer will work only after economic default.
why j-ppl hate and dont accept concentration of power appropriate to change society drastically is that they never have faced a crisis of the race extinction for good or evil. i do hope that after china economy collapse, desperate chinese army invade japan and kill a certain amount of j-naitonals.
and j-ppl will seriously seek for a powerful savior.

why would they invade Japan?

No resources to speak of, not enough land to grow enough food, hot and sticky in summer, fucking cold in winter, it's either fucking steep mountain and dense wood, soggy fucking silt plane, or Saitama, a national diet of foraged weeds, fish with their heads on, mercury filled whale meat and irradiated sticky rice, and only one type of beer made by several types of company

China's economy collapses they'd be better off heading to Siberia which global warming will turn into an earthly paradise.

you omitted some.
drying-out chinese drool over plentiful j-water resources and already bought some and want another.
and also they do want okinawa which is geopolitically needed to be a ruler of western pacific or east asia.

[Grumpy Gramps]

I have also heard that there might be some intelligent life form in Japan aside from the dolphins, if by any chance someone would be interested in such.

[matsuki]

If China wanted Japan, China would have taken Japan already.

I'm sure the US wouldn't have anything to say about that if they tried.

Try separating China from anything that isn't too modern and Japanese...China already took Japan, it's just back from a long vacation, drunk and horny.

[Wage Slave]

A spinback from the My Number thread which got a bit off topic on negative interest rates.

I said I didn't think that negative interest rates, even if implemented for retail banking, would do anything to help stimulate spending and might actually have the opposite effect by making ordinary people feel even poorer and less willing to spend than they do already with interest rates effectively zero. Banks meanwhile aren't very interested in lending the vast sums they have, except to favoured corporate clients who then seem to be using the money to stagger on but achieve little else. So the people who would spend and do things with money are being starved of it, while the people who already have more than they can or will deploy have unlimited amounts thanks to QE. A classic misallocation of resources problem, if they are serious about raising growth and inflation.

A sector that is growing very fast in The US, UK and Australia is peer to peer lending. This differs from other crowdfunding which is either more charitable or equity based. The are a variety of sites covering secured and non-secured lending to individuals or companies for a variety of purposes. Some offer fairly extreme automatic diversification to moderate risk while others don't. Still others spread risk further by maintaining provident funds to cover defaults while offering a lower rate of interest.

I've been watching it for about two years and playing in a modest way for about a year. So far, so good. I'm earning about 10% and haven't had a default yet. No doubt I will, but I only lend with security so there should be some recovery. A reasonable estimate of losses on secured lending, with normal luck and decent diversification, is about 2% a year which should still leave about 8% pa over 5 years or so.

I haven't heard of it being done here and nor have people I have talked to about it but I reckon it would work very well in Japan and it would help the economy a lot:

1. Cut out the banks.
2. Give people a decent return on their savings without having to play the equity casino. Those people would feel a bit more like spending once they see a bit of income on their savings.
3. Allow small to medium size businesses to access funds quickly and without the dead hand of the banks on them.
4. Specialist sites can offer young people mortgages to buy land and property or offer loans to higher risk start ups or offer personal loans to buy a new car or something. People can assess the risk and reward and decide for themselves whether they want to lend. There are a lot of older people with surplus funds who have considerable business experience and who would be pretty good at it I reckon.

Thoughts? Google will point you at any number of sites but a few names from the UK are: Thin Cats, Zoopla, Funding Circle and Assetz Capital.

[wagyl]

The biggest issue with p2p lending is regulatory. There is an undertow of "can we expect the average investor to understand the risks, and there are risks" which made it slow to gain approval at first. Japan is a country of fine detail regulations of nanny-state proportions. And the population is trained since kindergarten to have risks managed for them by others, and most of them never ever grow out of it. I don't predict this happening in my lifetime.

Incidentally, I did myself consider dipping my toes into these waters in one of the countries you mentioned, but the lack of a telephone number registered in that country was a fatal flaw and prevented my registration.

As to how much it helps the economy, I am undecided on that. Most of the schemes I have seen, the borrowers are people who are good risks and who would have got a loan anyway, they are just getting it a little cheaper than through the banks, with perhaps a little more flexibility. The bad risks have to do things the old way, and are not helped by these schemes at all. And the rates you may be getting in the United Kingdom are based on the general rates within that country. In a lower interest rate environment like Japan you would not be seeing the returns you are seeing overseas.

I was also actually surprised how few lenders there were in these schemes and how small average loans were. For example, been running three years, with pretty extensive PR in the press, on television, and on rate aggregator sites, yet funds on loan are less than 100 yen per head of population. And number of lenders just more than one in 10,000.

[Wage Slave]

As to how much it helps the economy, I am undecided on that. Most of the schemes I have seen, the borrowers are people who are good risks and who would have got a loan anyway, they are just getting it a little cheaper than through the banks, with perhaps a little more flexibility.

UK banks, curses be upon them, seem to be in a mode now in which they are pretty much refusing to lend to small business at all. Meanwhile they are battling claims of mis selling of other products to small/medium businesses and claims of rampant overcharging. Perhaps just too big and with too high a cost base.

And the rates you may be getting in the United Kingdom are based on the general rates within that country. In a lower interest rate environment like Japan you would not be seeing the returns you are seeing overseas.

True, but the base rate in the UK is and has been for a long time 0.5%. Rates for a one year fixed deposit are at about 1.3%. Not all that different an environment, I would suggest. You can't get the very long mortgage fixes at low rates like you can here but otherwise I am not so sure it's so different. And outside very carefully vetted mortgage lending here, lending appears pretty expensive.

I was also actually surprised how few lenders there were in these schemes and how small average loans were. For example, been running three years, with pretty extensive PR in the press, on television, and on rate aggregator sites, yet funds on loan are less than 100 yen per head of population. And number of lenders just more than one in 10,000.

This is in Japan? Can you remember the name - I'd like to have a look.

[FG Lurker]

Businesses can get money here quite easily as long as there is a little history and a little profit. I got 20mil yen recently, it was much easier than I expected. If a business has no history and no profit it's more difficult, but it'd be more difficult to get money from any source in that situation.

Negative interest on bank accounts hasn't happened yet. The only way that would be workable would be if cash was eliminated and all transactions were electronic. If people have access to cash they'll just horde it rather than keep it in the bank losing "disinterest" (for lack of a better term). Negative rates would definitely have quite a crazy impact on gold & silver prices, along with anything else that could be purchased and later sold relatively easily.

[wagyl]

I was also actually surprised how few lenders there were in these schemes and how small average loans were. For example, been running three years, with pretty extensive PR in the press, on television, and on rate aggregator sites, yet funds on loan are less than 100 yen per head of population. And number of lenders just more than one in 10,000.

This is in Japan? Can you remember the name - I'd like to have a look.

No, it is not in Japan. It is in one of the countries you referenced. I changed the funds on loan to Japanese currency to make it non-specific to that country, and to put a Canadian or two off the track (One of them isn't paying enough attention. The other doesn't have the skillz. You can make your own judgement as to who I am referring to).

[Wage Slave]

Businesses can get money here quite easily as long as there is a little history and a little profit. I got 20mil yen recently, it was much easier than I expected. If a business has no history and no profit it's more difficult, but it'd be more difficult to get money from any source in that situation.

Negative interest on bank accounts hasn't happened yet. The only way that would be workable would be if cash was eliminated and all transactions were electronic. If people have access to cash they'll just horde it rather than keep it in the bank losing "disinterest" (for lack of a better term). Negative rates would definitely have quite a crazy impact on gold & silver prices, along with anything else that could be purchased and later sold relatively easily.

Interesting. How much interest out of curiosity? Secured or unsecured?

Make all transactions electronic? In this country? Not likely. I think you could still introduce negative interest rates but yes the demand for cash would rocket and as I said I don't think it wouldn't really do any good. Actually, the opposite.

[Wage Slave]

I was also actually surprised how few lenders there were in these schemes and how small average loans were. For example, been running three years, with pretty extensive PR in the press, on television, and on rate aggregator sites, yet funds on loan are less than 100 yen per head of population. And number of lenders just more than one in 10,000.

This is in Japan? Can you remember the name - I'd like to have a look.

No, it is not in Japan. It is in one of the countries you referenced. I changed the funds on loan to Japanese currency to make it non-specific to that country, and to put a Canadian or two off the track (One of them isn't paying enough attention. The other doesn't have the skillz. You can make your own judgement as to who I am referring to).

Ah, I see. The figures for the UK are much much higher than that and growing very fast. Perhaps we are a bit unfair on the banks, we require near complete safety from them and then complain when they won't take risks lending. However, that's not how they got into trouble and they really don't seem to show any appetite to just do old fashioned, simple lending.

Perhaps in fact the banks here are different and do lend to SMEs pretty freely - It's not my impression but I wouldn't claim any knowledge. The fact remains there is a lot of money in the hands of people who are pretty savvy, who have time to assess borrowers prospects and who don't need to spend very much in normal life.

[FG Lurker]

Interesting. How much interest out of curiosity? Secured or unsecured?

Unsecured but with loan insurance in case I croak. Interest rates were Japanese-level low, 1.something%.

Make all transactions electronic? In this country? Not likely. I think you could still introduce negative interest rates but yes the demand for cash would rocket and as I said I don't think it wouldn't really do any good. Actually, the opposite.

Japan is moving quickly towards electronic transactions already. When I first arrived here in '93 it was extremely difficult to use non-Japanese credit cards in shops and many shops (even relatively large chains) didn't accept credit cards of any sort. Many places that did accept credit cards charged 3% to 5% extra for their use. The concept of debit card use in stores didn't yet exist at all. Now cards of all sorts (and from all over the world) are taken at every shop of any sort of size. About the only places that don't take cards are the tiny shops run by people in their 80s and those shops are disappearing rapidly. The days of Japan being a cash-only economy have passed.

Negative rates would be meaningless if people could withdraw their money and hold it in cash. There would be huge bank runs with lines around the block. The only way negative rates would be workable would be to get rid of cash first. The goal of negative rates is to encourage investment & spending, not to encourage people to horde paper money. (I don't expect negative deposit rates to become a thing in Japan so I also don't expect paper cash will vanish here any time soon.)

[matsuki]

Now cards of all sorts (and from all over the world) are taken at every shop of any sort of size. About the only places that don't take cards are the tiny shops run by people in their 80s and those shops are disappearing rapidly. The days of Japan being a cash-only economy have passed.

You don't eat at Yoshinoya much, do you? I just made reservations at this "adventure park" for a friend's birthday...they only take cash. Go to the vet for vaccinations....cash prrrrrease! Clinic? Dentist? Cash Cash Cash....there are still far too many "cash only" places here for my liking....

[FG Lurker]

You don't eat at Yoshinoya much, do you?

Not if I can avoid it!

I just made reservations at this "adventure park" for a friend's birthday...they only take cash. Go to the vet for vaccinations....cash prrrrrease! Clinic? Dentist? Cash Cash Cash....there are still far too many "cash only" places here for my liking....

All of the places you mention would simply switch over. "You will take cards or you will go out of business because there is no more cash" would be surprisingly motivating. It's not like they would be given any other option. There are systems in place that these places could use if they wanted to, they just prefer not to right now. That preference would change if they had no option for paper money. (Or maybe they would decide to close down instead but either way the "cash please" problem would be gone.)

As I have already said, I do not expect this to happen. All I am saying is that if the Japanese gov't wants to implement negative rates on deposit accounts that they can't do it with cash still available because it won't work.

[kurogane]

Japan is moving quickly towards electronic transactions already.

Just last month in downtown Tokyo (of all places) I was able to use my Cdn credit card at 2 of the 6 or 7 places I visited. I remember feeling very Vancouver at the time. Circa 1989


BUT, that old FOREIGN!! credit card issue seems to have disappeared, at last, TFG.

The days of Japan being a cash-only economy have passed.

Not that I intend to do anything so involved, but I would be very interested to test that statement based on total national usage rates (credit/electronic vs. cash). I will say as a counter that once you leave metropolitan Japan your statement quickly becomes less defensible, in MYHOMO and IME, natch. OTOH, I no longer pay attention and live on cash anyways, so the options may be there and I just didn't notice. One thing I did notice in Okinawa was those BS'y endrun PitaPokePuchiPay options (loaded cash cards?), but that was at national chain corner stores. As a simple rule, I would say that metropolitan and touristed Japan, yes, others, no, not at all, and thinking otherwise leads to Matsuki-isms, so do be careful out there. Being from LA need not be a mental death sentence.

BTW, on a side note, and allowing that I don't pay enough attention to have the skills necessary to be sure, Cdn P2P type hipster lending in Canada is quite surely quite regulated relative to the other nations that took the big rollercoaster in 2008. We like regulation, and especially financial shit. And it does sound like gay banking for skids to most normal Cdns. Compare that to our heavy national consumer debt load and I am sure it shows that we only think we're wired up.

[Wage Slave]

As I have already said, I do not expect this to happen. All I am saying is that if the Japanese gov't wants to implement negative rates on deposit accounts that they can't do it with cash still available because it won't work.

You are being a bit too simplistic and that's why I missed your point. It strongly depends on what level of negative interest rate they were to set. Set it at -10% and yes, certainly, the demand for cash would be astronomical.

However, set it as negative as it is now positive -.01% or thereabouts and there wouldn't be anything like the same reaction. The vast majority of people would suck that up in exchange for security and might perhaps have a bit more propensity to spend at the margin. And that would be job done as far as the BoJ is concerned.

Not that I think it would be good policy or would really work. Just making the argument.

[kurogane]

Not much to disagree with there, as I apparently either don't pay enough attention or have the right skills, but you might be overestimating the typical Japanese saver's reaction to as large a rate change as one set to negative 0.01%. That's a hundreth of a percent, as you know, which is the equivalent of 1 yen per 10,000 (assuming that skill set still works).

Assuming somebody has 1,300,000 yen in savings that could really puff up one of those awful buckwheat husk pillows What I do agree with FG about is the potential for a fairly economicaly damaging but thoroughly Chaplinesque herd reaction to even a very limited negative rate. The Japanese and especially older Japanese operate on margins so slim not even cheap arsed buggers like us can relate to them. And they hate banks, as they well should. And it is adorable. Nyorrro..............