Posted on 03/31/2009 7:09:32 PM PDT by TigerLikesRooster
Japan's business confidence hits record low
47 mins ago
TOKYO (AFP) – Business confidence among major Japanese manufacturers hit a record low in the three months to March, as the global economic crisis deepened, the central bank said Wednesday.
Confidence tumbled to minus 58 in March from minus 24 the previous quarter, plunging below its previous record low of minus 57 registered in 1975, according to the Bank of Japan's Tankan survey of more than 10,000 firms.
Manufacturers painted a grim outlook for businesses, forecasting confidence would stay at minus 51 in June.
The index measures the percentage of firms that think business conditions are good minus those that think they are bad.
(Excerpt) Read more at news.yahoo.com ...
For a last couple of years, ruling LDP of Japan is foundering and inept. Two PM's, Abe and Fukuda, are come and gone. Aso came, a little more hawkish, but in other issue such as economy, no better than the previous two. They have been viewed as rehash of old money politics, indecisive and incompetent.
There were expected to be routed in the coming election. A sense of crisis was spreading in ruling circles. Then, Chia Head came out and started to create this international crisis, which can be a direct threat to Japanese security, if left unchecked.
Ruling power was also busy bringing up other political hot-button issue which is in their favor: Japanese abductee problem. There was a greatly publicized meeting between families of Taguchi Yaeko, a Japanese abductee, and former N. Korean covert agent Kim Hyun-hee, who claimed that Taguchi was her Japanese teacher, the first eye-witness confirmation of Japanese abductee which flung open the investigation of Japanese abductee issues and ensuing international attention.
Now, with N. Korea gearing up for long-range missile test disguised as satellite launch, N. Korean threat is grabbing attention of Japanese public. Economically battered and now about to be stressed out by N. Korean movements, time is right for LDP to declare 'going solo' and bring up their long-cherished agenda, the scrapping of Peace Constitution and no extra legal restraint on military actions.
When Abe was PM a couple of years ago, he pushed for it, but public's mind is more on incompetent handling of pension management and other domestic issues. Public ignored it and he failed. The fact that he brought this up after he was backed into a corner about domestic issues did not help. It was viewed as a transparent ploy by an incompetent politician incapable of solving the problem people really care about.
Now things are different. People are no longer placid. Jobs are under serious threat, and whole industries are at risk. Maybe they are in better shape than other countries battered hard, but none the less downturn has been brutal. People are more edgy, and no longer risk-averse as they did as late as first half of last year.
LDP cannot blunder along and even take the blame for diving economy. They need an escape plan. Kim Jong-il is providing the excuse now. This time, public is less resistant to whole questions of military matter and national security. Is it guaranteed to succeed? Well, we have to wait and see. However, if N. Korea succeeds in long-range missile launch, and on top of it carry out a second nuke test, it could be 90% certain that Japan makes the fateful leap from present geopolitical status quo. If Obama caves prematurely and suck up to N. Korea, it will be as effective as N. Korea's second nuke test.
Political and economic forces are converging to push sea change in Japan, changing status quo in E. Asia. China is happy with the present status quo, including maintaining division of Korean Peninsula, and keeping firm hold on the Northern half of it. That is all fine and good, as far as China is concerned. Occasional N. Korean antics are tolerable or even useful if they stay within the boundary set by China. They even decided to condone N. Korean claim of successful nuclear test in 2006. They did it because the nuke test did not bring any real change to Japan or U.S. posture. After raising some heckles, Japan moved along. This time N. Korean provocation is more belligerent and Japanese government is ratcheting up tension, matching every N. Korea move with its own.
With looming depression in the background, military standoff is heating up. The result could change status quo, which China dreads. China may act not because of U.S. concern but out of fear that Japan will be militarily active and even go nuclear, fielding nuclear missiles pointed at China's heart. Japan's populace is aging and may not provide unending stream of fresh young male bodies to serve as grunts, but it still has sizable force, especially powerful navy. Japan is definitely capable of boxing China into its land territory, denying them any projection power.
So what would China do? Condone N. Korea's acts again, confident that Japan would complain but not really act to change the status quo? Or would they feel the need to head off chain reaction leading to resurgent Japanese military power?
Ping!
You forgot one little issue:
Japan’s disappearing current account surplus.
What are we going to do when Japan has a trade deficit because we’re no longer buying their products?
Well, for one thing, they might not be so keen to buy our debt...
It is everything you say. The lack of attention to Japan’s plight is something that really makes me wonder where Wall Street’s head is at (well, we already know — up their plump rump...)
Too many on the east coast have European/EU fixation.
Far too few are paying attention to Japan, their collapsing export markets, their collapsing auto industry, etc.
No one appears to be thinking of “what happens to a Japan where the price of oil is up and their export markets are in the dumper?”
And mind you, Japan is into a whole new round of QE... and the previous bouts of QE are, by all accounts I can find on the Federal Reserve’s web library, not an unqualified success. At best, the Japanese experience shows us that QE merely makes things suck a little bit less. At worst, it does nothing and drives up public debt.
What is QE? Thanks.
Quantitative Easing... sorry for tossing that around without definition.
By which I mean the deliberate purchase of commercial, asset-backed or sovereign debt by a central bank (eg, the recent purchase of commercial debt by the BOJ, or the purchase of mortgage and Treasury debt by the Fed).
OK thank you. So this is one form of bailout?
OK thank you. Another marketing buzzword but it all means the same crap.
It is a tactic devised by central bankers to warp the yield curve or target specific debt markets.
For example: Look at what fixed-rate mortgages have done here in the US in the last two weeks. The Fed is buying agency and residential mortgage securities in a quest to push the rate on a 30-year, fixed, conforming note down to near 4.5%.
As of today, here’s some rates:
Type Today 1 Mo. Ago 3 Mo. Ago, 6 Mo. Ago,
30-year, fixed: 4.89 5.25 5.26 5.94
15-year, fixed 4.65 4.85 5.07 5.68
You can see the decline here in the last month - that’s the result of the Fed starting QE by buying RMBS and agency paper about 10 days ago now.
Tomorrow, the Fed is putting in another big buy today and tomorrow — on 3/18, the Fed said that they’d buy $300B of US Treasuries in order to depress the long end of the curve.
Thank you very much, I understand it better now.
The term quantitative easing refers to the creation of a pre-determined quantity of new money 'out of thin air'[1] through open market operations by a central bank as the start of a process to increase the money supply. It can, more simply, be understood as an indirect method of printing money. This new money is injected into the private banking system when the accounts of the vendors of the securities purchased by the central bank through the open market operations are credited.
http://www.youtube.com/watch?v=HrjBddCTCmk
Dire Straits - walk of life
And maybe they’ll call the ICBM’s the ‘Zero’...
...as a curtesy to Obama (or to history, I forget which).
:-P
Imagine the horror of the US having to live on its own resources for a change. Please Bernanke, get the printing presses rolling before we have to start working for a living.
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