Posted on 02/10/2009 8:35:02 PM PST by TigerLikesRooster
Japan faces ‘unimaginable’ contraction
By Mure Dickie in Tokyo
Published: February 9 2009 15:04 | Last updated: February 9 2009 18:46
Japan’s economy faces an “unimaginable” contraction, the chief economist of its central bank warned on Monday, as figures revealed surging bankruptcies and a big fall in machinery orders.
The warning from Kazuo Momma, head of the Bank of Japan’s research and statistics department, underscored the gloom surrounding the world’s second-largest economy as export orders dry up, companies shut down production lines and consumers stop spending.
Japan, where industrial output plunged a record 9.6 per cent month on month in December, is due to announce fourth-quarter gross domestic product data next week. Polls of economists suggest GDP will have fallen more than 3 per cent compared with the previous quarter – an annualised decline of more than 10 per cent.
(Excerpt) Read more at ft.com ...
Ping!
Uhoh not good. This makes me wonder even more if China is not fudging their current numbers.
Get them a stimulus package....oh, never mind.
How could they not be?
Nevermind, I now see your post about China.
Bush's fault!
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
cars mostly?
They are. As well as Taiwan, S. Korea, etc.
GDP losses of 10% are in the ‘depression’ category. This is no mere recession.
yes they are. Their growth rate was around 0% in the 4th quarter
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).
Right.
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.
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.”
The US is their stimulus package...oh, never mind
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.
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