Japan faces ‘unimaginable’ contraction(annualized GDP fall: -10%)

FT ^ | 02/09/09 | Mure Dickie

[TigerLikesRooster]

Ping!

[WVNight]

Uhoh not good. This makes me wonder even more if China is not fudging their current numbers.

[lacrew]

Get them a stimulus package....oh, never mind.

[angkor]

How could they not be?

[WVNight]

Nevermind, I now see your post about China.

[rb22982]

Asia is collapsing. Singapore, S. Korea, Japan, and now China (-17.5% export/ -43% imports) are free falling. The first 3 are going to have double digit gdp drops and China will go negative in short order. All of the export economies are getting destroyed.

[Dick Holmes]

The Japanese gloom was replicated in Taiwan, Asia’s sixth-largest economy. In January exports fell by 44.1 per cent from a year ago, the biggest decline since government records began in 1972. It was the fifth consecutive month that exports have shrunk.

Bush's fault!

[traumer]

[TigerLikesRooster]

This means China is bound to follow pretty soon.

[GeronL]

Obama is devaluing our currency with what now looks like $3.5 trillion in stimulus and bailouts. Just printing money. and they are just getting started.

The value of new dollars is sucked from old dollars.

currency devaluation

[wardaddy]

cars mostly?

[NVDave]

They are. As well as Taiwan, S. Korea, etc.

GDP losses of 10% are in the ‘depression’ category. This is no mere recession.

[GeronL]

yes they are. Their growth rate was around 0% in the 4th quarter

[wmfights]

Asia is collapsing. Singapore, S. Korea, Japan, and now China (-17.5% export/ -43% imports) are free falling. The first 3 are going to have double digit gdp drops and China will go negative in short order.

If these countries don't have growth they will be confronted with hard choices about whether to buy Treasuries or not. If they don't buy them we slide further and they lose us as an export customer. If they keep buying them it's less money to invest in their citizens and the possibility of explosive disapproval from citizens exists (especially China).

[TigerLikesRooster]

This is no mere recession.

Right.

[Uri’el-2012]

The Japanese have been trying to "fix" their economy since 1987.

They are using the same technique as we now are.

Twenty years and it's not fixed yet.

[NVDave]

You have put your finger squarely on the issue there. These countries (many of whom have a trade and account surplus with the US) now have a really, really hard choice to make:

1. Buy US paper at pitiful yields, thereby allowing the Fed and Congress to possibly reflate the US economy, only to see a prolonged period of mediocre US consumption of their exports, or

2. Bail on the US as the engine of their economies by refusing to buy any more US paper (they don’t even have to sell the paper they have — just stop buying the flood of new paper), turn their account surpluses inwards and stimulate their own economies, but guarantee that the US consumer is nearly a non-existent factor in their exports for at least five years, possibly as much as 10 years.

CompSci people have a term for this type of “resource contention” in concurrent programming systems: “the fatal embrace.”

[silverleaf]

The US is their stimulus package...oh, never mind

[misterrob]

The ultimate in codependant relationships....

The population of these countries are going to feel (if they are not already) mighty enraged against the West even though they helped fuel the problem and allowed their trade balances to go seriously out of whack.

There is another crash downward in the markets starting to happen. The bond prices are going to continue to increase, commodities are going to spike and we are all uck-fayed.