Japan’s exports nearly halve

FT ^ | 03/25/09 | Michiyo Nakamoto

[TigerLikesRooster]

Japan’s exports nearly halve

By Michiyo Nakamoto in Tokyo

Published: March 25 2009 03:15 | Last updated: March 25 2009 06:02

Japan suffered another record drop in exports last month while imports also fell much more than expected, highlighting the damaging impact of the global downturn on the world’s second largest economy.

Exports nearly halved in February, falling 49.4 per cent from a year earlier, as demand for Japanese goods plunged in key markets.

The decline in exports was the steepest since 1957 and worse than most economists had anticipated.

However, imports also fell much more than expected, dropping 43 per cent amid declining corporate earnings and rising unemployment.

[TigerLikesRooster]

Ping!

[dennisw]

Japan’s largest markets aren’t buying because they are low on cash to buy consumer goods. Those markets are USA, Canada, Australia, Western Europe

Consumers are low on cash and credit to “buy stuff” is harder to come by

[DB]

The big mistake all these politicians are making is this recession isn't being caused by the business cycle.

It is being caused by excessive debt on essentially all fronts, both private and public. This wasn't a housing bubble, it was a credit bubble of immense proportions which manifested itself primarily in housing. You can't spend - that is stimulate - your way out of excessive debt. Government is doing all it can to get Americans to start borrowing again. It isn't going to happen. People are tapped out while at the same time government is increasing taxes across the board. Increased corporate taxes will land on consumers. Energy taxes will land on consumers. Increased taxes on the "wealthy" will reduce jobs and reduce demand for what "wealthy" people buy. And at the same time government is destroying the value of the dollar. That value destruction is wiping out the value of savings. All the prudent people who didn't get in over their heads in debt or who are on fixed incomes are being wiped out as well...

Stupid is what stupid does and we are in full stupid mode at both the state (CA) and national level these days. The only outcome possible is economic failure on a grand scale.

[dennisw]

It was a world wide credit bubble fueled by world wide easy money. Greenspan dished out the cheap money which allowed Wall Street to leverage itself 30-1 in derivatives and other schemes. Greenspan’s easy money policies were copied by other countries

Austria Switzerland Germany lent out billions to Eastern Europe and those loans are doing as bad as any subprime drek wee have here in USA

[DB]

I agree with that.

[DB]

I believe the Europeans lent a lot of money to South America as well with similar results.

[dennisw]

I believe the Europeans lent a lot of money to South America as well with similar results.......

Yup lots of Europan banks and investment houses are in a deep deep hole. With Royal Bank Scotland being the sickest bank. They didn’t use subprime mortgages but easy money always finds a way to manifest itself into a bubble

In retrospect it is easy to see we had a worldwide bubble from (roughly) 2001 to 2007

[mr_hammer]

“The big mistake all these politicians are making is this recession isn’t being caused by the business cycle.
It is being caused by excessive debt on essentially all fronts, both private and public. This wasn’t a housing bubble, it was a credit bubble of immense proportions which manifested itself primarily in housing. You can’t spend - that is stimulate - your way out of excessive debt. Government is doing all it can to get Americans to start borrowing again. It isn’t going to happen. People are tapped out while at the same time government is increasing taxes across the board. Increased corporate taxes will land on consumers. Energy taxes will land on consumers. Increased taxes on the “wealthy” will reduce jobs and reduce demand for what “wealthy” people buy. And at the same time government is destroying the value of the dollar. That value destruction is wiping out the value of savings. All the prudent people who didn’t get in over their heads in debt or who are on fixed incomes are being wiped out as well...Stupid is what stupid does and we are in full stupid mode at both the state (CA) and national level these days. The only outcome possible is economic failure on a grand scale.”

So much wisdom in so few words...I told a group business leaders the exact same thing a few nights ago at a round table meeting. The look on their faces was as if someone spilled their drink into their lapp...”but Obama said this spending will get us up and running” was their response.

My retort was...how are you going to force people to borrow?

[Travis McGee]

That’s not just a depression, they need a new word.

[nicola_tesla]

That word is K-Winter, Kondratieff Winter.

http://www.kwaves.com/kond_overview.htm

[1010RD]

Nothing like a “trade surplus” to sustain an economy, eh?

[1010RD]

So Japan’s vaunted, though imaginary, “surplus” in trade is good for what?

You never gave a coherent answer to that on the other thread.

[1010RD]

Plus, all that borrowing just jacks up future interest rates, taxes and inflation.

We’re not going to borrow/tax/inflate our way out of this. Producers need to be encouraged to invest and to do that will take massive tax reductions (not special deductions or targeted cuts) on capital and productive assets - like zeroing out the corporate tax rate and the capital gains taxes; spending freezes and reductions at local, state and federal level; deregulation of the energy, health care, home building and financial markets; lawsuit reform (loser pays would do the trick along with limits on payouts to attorneys for class actions) to finish it out.

This will allow innovation. One reason why you see so little innovation in large companies is not due to size, but to the regulatory regime that controls them. Innovation comes at the leading/bleeding edge only because of the absence of regulation.

[Travis McGee]

Bingo. Thanks.

[dennisw]

I’ll get there

[1010RD]

I am looking forward to it, thanks.

[Gritty]

The Japanese just have to get smart like us by doubling their budget and printing money like there's no tomorrow. That will fix their problems! /s/

[Gen-X-Dad]

Everyone is desperate to reinflate the derivatives bubble which is currently unwinding. The underlying assets that this scheme is based on became value bubbles thanks to all the easy money sloshing around in the system. Just like the tulip bubble of the 1600’s and all other bubbles, what goes up must come down. Until the asset bubbles are back to where they should be based on a 2 to 3 percent inflation rate we have not hit the bottom. Trying to pump money into the top to keep the asset bubbles a float is not going to work. It is like pouring money into a black hole.

The global economy cannot survive as it depends on constant growth. Imagine Japan and China in a year if the American consumer cannot buy anything because we are broke. When all these bubbles finally collapse we are going to have the mothers of all resets. The longer they delay it, the harder it is going to be. The funny thing is that our fearless leaders keep acting like it is business as usual and are rejecting the reality before them. The definition of insanity is playing out before us.

[gandalftb]

Japan's biggest problem is competition from China. China has a higher productivity rate and their labor costs are a fraction of Japan's. Japan also suffers from a controlled economy that stifles internal competition and free enterprise.

Japan suffered a banking crisis 15 years ago, and did what we are doing, and has never recovered....