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LWW
03-15-2011, 06:05 AM
... assuming anyone wants to learn.

Japan, 25 years ago it was the unstoppable economic force. Lean and mean government and corporate management walking hand in hand across the planet ... conquering all that lay in their path.

And then they decided that the prudent thing to do was follow the misguided policy of the western social democracies. State spending escalated, investment slowed, values plummeted, crown jewel investments abroad began to be sold off.

The NIKKEI index which topped at 39,800+ in late 1989 fell to under 10,000 ... before the earthquake. Since the earthquake their markets have been in freefall.

In 1976 it took 15% of Japanese tax revenue to service their debt. By 2002 it took 70%.

Japanese state debt is now at 220% of GDP while the US is at 85%.

At the start of Japan's first "LOST DECADE" they were at about 65%, which is a little higher than where we were at the start of our first lost decade.

Japan now is past the end of it's second lost decade while we are running blindly into the second.

Now, when an actual disaster strikes the nation ... Japan is broke, with the task of rebuilding a nation at hand.

Do we follow them to fiscal disaster as they followed the Euros, or do we come to our senses and learn from the folly of others?

Stay tuned. Buckle your seat belts. This may get verym, very ugly before it gets better.

Qtec
03-15-2011, 06:13 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">... assuming anyone wants to learn. </div></div>

That's funny coming from someone who uses words like Obamatron and Thugocracy on a regular basis.

Q

Soflasnapper
03-15-2011, 09:39 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: LWW</div><div class="ubbcode-body">... assuming anyone wants to learn.

Japan, 25 years ago it was the unstoppable economic force. Lean and mean government and corporate management walking hand in hand across the planet ... conquering all that lay in their path.

And then they decided that the prudent thing to do was follow the misguided policy of the western social democracies. State spending escalated, investment slowed, values plummeted, crown jewel investments abroad began to be sold off.

The NIKKEI index which topped at 39,800+ in late 1989 fell to under 10,000 ... before the earthquake. Since the earthquake their markets have been in freefall.

In 1976 it took 15% of Japanese tax revenue to service their debt. By 2002 it took 70%.

Japanese state debt is now at 220% of GDP while the US is at 85%.

At the start of Japan's first "LOST DECADE" they were at about 65%, which is a little higher than where we were at the start of our first lost decade.

Japan now is past the end of it's second lost decade while we are running blindly into the second.

Now, when an actual disaster strikes the nation ... Japan is broke, with the task of rebuilding a nation at hand.

Do we follow them to fiscal disaster as they followed the Euros, or do we come to our senses and learn from the folly of others?

Stay tuned. Buckle your seat belts. This may get verym, very ugly before it gets better. </div></div>

That's not correct history. What did in the Japanese economic miracle was the same kind of bankster fraud, and Nikkei and real estate bubbles from all the money sloshing around the country bidding up all assets in their own version of irrational exuberance, similar to what happened here. A bit worse, as the Yakuza became a joint partner with the ruling government party, adding still more fraud to an imbalanced banking situation.

The inherent contradictions and inevitable crash tendencies in financial capitalism run amok bit them hard, and also have bitten us hard.

While Japan is indeed very heavily indebted, they are not broke, and I've heard nobody but you claim they cannot rebuild because of lack of resources. In fact, Japan is able to easily borrow at fairly low rates from world capital, DESPITE their 200%+ of their gdp national debt ratio.

LWW
03-15-2011, 10:02 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">That's not correct history.</div></div>

Actually ... it is.

Your data is additive to what to what I posted, but certainly not corrective.

Whether you realize it or not ... you are proving me wrong, in your own thoughts anyway, by agreeing with me.

We are repeating the Japanese mistakes as they repeated the Euro mistakes.

LWW
03-15-2011, 10:11 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">In fact, Japan <s>is</s> was able to easily borrow at fairly low rates from world capital, DESPITE their 200%+ of their gdp national debt ratio. </div></div>

From the reich wing NPR: (http://www.npr.org/2011/02/22/133955141/Business-News)

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">February 22, 2011

The credit ratings agency Moody's is cutting the outlook for Japan's bond rating from stable to negative. </div></div>


And:

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">After seeing an incessant economic troubles in Europe, global fears about unsustainable government borrowing reached Japan yesterday. A world’s leading ratings agency Standard & Poor’s issued a surprise downgrade of the country’s bonds.

S&P lowered the long-term sovereign-debt rating for Japan by one notch to double-A-minus, slamming the country’s political leaders for having no “coherent strategy” to tackle the nation’s fast-worsening fiscal problems. This is the first downgrade for Japan since April 2002. </div></div>


OH DEAR! (http://www.news-worthy.info/sp-downgrades-japans-bond-rating/6833/)

It takes a complete suspension of disbelief to imagine that an 8.9 magnitude quake, a major tsunami, a volcano eruption, 2 severely damaged reactors in the power grid, rolling blackouts, and a shutdown of many industrial plants will help that any.

Soflasnapper
03-16-2011, 01:38 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: LWW</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">In fact, Japan <s>is</s> was able to easily borrow at fairly low rates from world capital, DESPITE their 200%+ of their gdp national debt ratio. </div></div>

From the reich wing NPR: (http://www.npr.org/2011/02/22/133955141/Business-News)

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">February 22, 2011

The credit ratings agency Moody's is cutting the outlook for Japan's bond rating from stable to negative. </div></div>


And:

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">After seeing an incessant economic troubles in Europe, global fears about unsustainable government borrowing reached Japan yesterday. A world’s leading ratings agency Standard & Poor’s issued a surprise downgrade of the country’s bonds.

S&P lowered the long-term sovereign-debt rating for Japan by one notch to double-A-minus, slamming the country’s political leaders for having no “coherent strategy” to tackle the nation’s fast-worsening fiscal problems. This is the first downgrade for Japan since April 2002. </div></div>


OH DEAR! (http://www.news-worthy.info/sp-downgrades-japans-bond-rating/6833/)

It takes a complete suspension of disbelief to imagine that an 8.9 magnitude quake, a major tsunami, a volcano eruption, 2 severely damaged reactors in the power grid, rolling blackouts, and a shutdown of many industrial plants will help that any. </div></div>

They went from AA to AA-. A horrible reduction in credit rating, they are doomed! Or not.

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> But according to analysts, the size of the moves in credit markets was relatively small, nowhere near the investor pressures on countries such as Greece, Portugal and Ireland.

That reality reflects Japan’s unusual borrowing picture. Although Japan has outstanding debt, nearly 200% of the size of its economy, far bigger than the troubled European countries, most if its bonds are held by their own people, insulating the country from the market’s ups and downs.

“This downgrade by S&P also shouldn’t have any serious impact,” said Chotaro Morita, head of Japan fixed-income strategy research at Barclays Capital Japan Ltd. <span style='font-size: 14pt'>“Ratings haven’t been such a critical factor for the market also for the major reason that money flows have simply continued to be so supportive of JGB demand”.</span>

Despite its decision to downgrade Japan’s bond rating, S&P also said that <span style='font-size: 14pt'>the outlook for Japan’s bonds was now stable due to Japan’s strong external balance sheet and the “flexibility” that comes from the yen’s international role. Currently Japan has the world’s second-largest foreign reserves: more than $1 trillion.</span></div></div>

Soflasnapper
03-16-2011, 01:42 AM
Regarding just how extreme was the real estate bubble in Japan: a square block in downtown Tokyo was valued at more than the entire real estate value of Manhattan. The value of Tokyo in total was greater than the value of all the real estate in the US.

LWW
03-16-2011, 03:05 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: LWW</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">In fact, Japan <s>is</s> was able to easily borrow at fairly low rates from world capital, DESPITE their 200%+ of their gdp national debt ratio. </div></div>

From the reich wing NPR: (http://www.npr.org/2011/02/22/133955141/Business-News)

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">February 22, 2011

The credit ratings agency Moody's is cutting the outlook for Japan's bond rating from stable to negative. </div></div>


And:

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">After seeing an incessant economic troubles in Europe, global fears about unsustainable government borrowing reached Japan yesterday. A world’s leading ratings agency Standard & Poor’s issued a surprise downgrade of the country’s bonds.

S&P lowered the long-term sovereign-debt rating for Japan by one notch to double-A-minus, slamming the country’s political leaders for having no “coherent strategy” to tackle the nation’s fast-worsening fiscal problems. This is the first downgrade for Japan since April 2002. </div></div>


OH DEAR! (http://www.news-worthy.info/sp-downgrades-japans-bond-rating/6833/)

It takes a complete suspension of disbelief to imagine that an 8.9 magnitude quake, a major tsunami, a volcano eruption, 2 severely damaged reactors in the power grid, rolling blackouts, and a shutdown of many industrial plants will help that any. </div></div>

They went from AA to AA-. A horrible reduction in credit rating, they are doomed! Or not.

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> But according to analysts, the size of the moves in credit markets was relatively small, nowhere near the investor pressures on countries such as Greece, Portugal and Ireland.

That reality reflects Japan’s unusual borrowing picture. Although Japan has outstanding debt, nearly 200% of the size of its economy, far bigger than the troubled European countries, most if its bonds are held by their own people, insulating the country from the market’s ups and downs.

“This downgrade by S&P also shouldn’t have any serious impact,” said Chotaro Morita, head of Japan fixed-income strategy research at Barclays Capital Japan Ltd. <span style='font-size: 14pt'>“Ratings haven’t been such a critical factor for the market also for the major reason that money flows have simply continued to be so supportive of JGB demand”.</span>

Despite its decision to downgrade Japan’s bond rating, S&P also said that <span style='font-size: 14pt'>the outlook for Japan’s bonds was now stable due to Japan’s strong external balance sheet and the “flexibility” that comes from the yen’s international role. Currently Japan has the world’s second-largest foreign reserves: more than $1 trillion.</span></div></div> </div></div>

Which is a large part of their problem.

Japanese citizens have saved at a prodigious rate. This will undoubtedly slow, or more likely go negative as cash is pulled from markets to rebuild.

Corporations suffer the same fate.

Insurance companies are not set up to cover losses when nearly everyone has a loss at the same time.

Japan was able to quickly rebuild following WWII becaue they had massive US aid, and were debt free.

This one is much steeper hill to climb.

Sev
03-16-2011, 07:10 AM
As by products of this US steel sales as well as wheat and corn sales are expected to increase.

Oil is expected to spike as the rebuilding begins.

Insurance rates are expected to go up.

LWW
03-16-2011, 07:16 AM
And the bleating that we need coal and corn powered cars will escalate.