Abenomics (aka akphidelt-onomics) close to perfect in Japan! What a shocker.

[SheriffJoe]

fratfraud-onomics: "the government borrows unlimited money from the big in the sky"

Reality: “The government running out of money is not a story made up. It's a real threat," said Japan’s finance minister Jun Azumi

Conclusion: The KKK (Krugman-Keynesian Kult) still believes in Santa Clause ('tis the season for believin'!)..that's why you're a member of a kult (note the German spelling.. wink, wink)

How embarrassing for fratfraud.

 

[akphidelt]

fratfraud-onomics: "the government borrows unlimited money from the big in the sky"

Reality: “The government running out of money is not a story made up. It's a real threat," said Japan’s finance minister Jun Azumi

Conclusion: The KKK (Krugman-Keynesian Kult) still believes in Santa Clause ('tis the season for believin'!)..that's why you're a member of a kult (note the German spelling.. wink, wink)

How embarrassing for fratfraud.

Sheriff Joe Economics...

Not a single country in Europe that claims to be practicing austerity has cut spending. Oh, they've reduced its rate of growth which in the perverse mind of a statist is 'cutting' -- but they haven't actually reduced it.

That's austerity.

 

[SheriffJoe]

Japanese Prepare For "Abenomics Failure", Scramble To Buy Physical Gold


Submitted by Tyler Durden on 03/28/2014 10:42 -0400

As we reported yesterday, the world's most clueless prime minister, Japan's Shinzo Abe, has suddenly found himself in a "no way out" situation, with inflation for most items suddenly soaring (courtesy of exported deflation slamming Europe), without a matched increase in wages as reflected in the "surprising" tumble in household spending, which dropped 2.5% on expectations of a 0.1% increase in the month ahead of Japan's infamous sales tax hike. How does one explain this unwillingness by the public to buy worthless trinkets and non-durable goods and services ahead of an imminent price surge? Simple - while the government may have no options now, the same can not be said of its citizens who have lived next to China long enough to know precisely what to do when faced with runaway inflation, and enjoying the added benefit of a collapsing curency courtesy of Kuroda's "wealth effect." That something is to buy gold, of course, lots of it.

According to the FT, "Tanaka Kikinzoku Jewelry, a precious metals specialist, reported that sales of gold ingots across seven of its shops are up more than 500% this month. At the company’s flagship store in Ginza on Thursday, people queued for up to three hours to buy 500g bars worth about Y2.3m ($22,500). March has been the busiest month in Tanaka’s 120-year history."

Of course, while the Japanese consumers know what is the best defense against runaway inflation and purchasing power destruction, the government also knows that just like in India, where massive gold imports to satisfy local demand so skewed the current account deficit that India spent most of 2013 imposing gold capital controls, it simply needs to make gold purchases impossible in order to redirect spending into more Keynes-approved products and services.

However, for now Japan is happy just to crush its population's meager disposable income with soaring energy prices. Which also means the locals can allocate their personal capital in the most efficient way: one which discounts a very unpleasant future.

Investors are being drawn to the metal not just because of higher taxes, said Itsuo Toshima, an adviser to pension funds.“Slowly and steadily, people are preparing for the worst, which is the failure of Abenomics." “To protect the value of wealth, gold comes into play as an inflation hedge, and if the economy goes back to deflationary circumstances then, again, money seeking safe havens would flow into gold.”

​

Wait, did someone in Japan finally admit the inevitable, i.e., that Abenomics will crash and burn in a pyre of runaway inflation and a crashing economy? Well, good. The problem is that when that moment happens, the response to the government's "all in" bet to led its population into the slaughter will mean that one will need lead far more than gold.

But we'll cross that bridge when we get to it. For now, we eagerly look forward to yet another major buyer of gold emerging on the global landscape, alongside China, India, and all other countries not transfixed by the dulcet tunes of central-planning and nominal paper profits.

Japan’s hunger for gold bars is at odds with general sentiment towards the precious metal, the price of which fell 28 per cent last year, bring an end to a 12 year bull run. Yet Yuichi “Bruce” Ikemizu, head of commodities trading at Standard Bank in Tokyo, said retail buyers had been tempted into purchases by lower prices.

The Fruit of Gold ETF managed by Mitsubishi UFJ Trust and Banking, the country’s most popular bullion-backed investment vehicle, saw its assets rise from 5.6 tonnes, when Mr Abe assumed power in December 2012, to 6.9 tonnes now – even as the US dollar price of gold fell by more than a fifth over that period.

Individual investors in the fund numbered 15,243 in mid-January, a sharp increase from 9,849 a year earlier, said general manager Osamu Hoshi.

At Tanaka’s third-floor store in Ginza, one 33-year trader at a foreign-owned brokerage, who did not want to be named, said the tax increase represented a “good opportunity” to buy more gold as he was worried about holding too many yen-denominated assets.

“I plan to hold it for a long time until there is a good time to sell when the yen collapses or something,” he said.

Even a strong rise in Japanese gold purchases is unlikely to affect the global bullion market. Last year consumer demand in Japan was 21.3 tonnes, according to the World Gold Council, compared to 1,066 tonnes in China and 975 tonnes in India.

​

Unlikely? Really - lets see what happens when 100 million Japanese suddenly decie half a kilo of gold is precisely what the doctor ordered. Then again, this is the FT, the same media outlet that recently, and inexplicably, pulled an article discussing gold manipulation without any explanation.

:neenee:

 

[akphidelt]

Well if it's on the Internet, it must be true!!

 

[rolltide]

ah, perfection Loser!@#0


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[h=1]Japanese GDP Plunges 6.8% As Consumer Spending Collapses By Most On Record[/h]08/12/2014 19:58 -0400


Compared to the 3.6% drop in GDP when Japan last hiked its consumption tax in 1997, today's Q2 GDP collapse of 6.8% annualized is an utter disaster (even if it is slightly better than the expected -7.0% expectations thanks to a surge in the deflator). Inventory additions added 1.0% growth. Consumer Spending collapsed 5.2% QoQ - the most on record. Of course, in the traditional of Keynesian hockey-sticks, this XX% collapse in Q2 is expected to surge back to a 2.5% growth figure in Q3 and lead Japan to the holy grail once more.. only it didn't quite work out that way last time for Japan. Simply put this is the worst posible outcome for bulls, small beat not enopugh to rejuice QQE. As a gentle reminder of just what happened in 1997 - the last time Japan hiked taxes - we provide the eerily analog chart below...

Japanese GDP growth was almost twice as bad as the last time Jap[an hiked its taxes...


As Consumer Spending collapsed...


Here come the hockey-sticks...


* * *
Let's hope the last 10 months was just coincidentally 90% correlated to 1997!!


And remember - they were quantitatively easing then too!




____________________________________________________________________


[h=1]Japan shows sharp contraction in second quarter[/h]

Japan's economy contracted sharply in the second quarter, data on Wednesday showed, as a nationwide consumption tax that took effect in April dragged on its recovery.
Gross domestic product (GDP) shrank an annualized 6.8 percent in the three months ending in June, compared with a Reuters forecast for a 7.1 percent contraction and after growing 6.7 percent in the first quarter.
On a quarterly basis, the economy shrank 1.7 percent, versus expectations for a 1.8 percent contraction and following a 1.6 percent expansion in the first three months of the year.







The data underscores the challenges faced by Prime Minister Shinzo Abe, who is trying to engineer a sustainable recovery for the economy while keeping the country's mounting debt, which is among the highest in the developed world, in check.To rein in the country's debt-to-GDP ratio, which currently stands at north of 240 percent, the government in April raised the sales tax to 8 percent from 5 percent, the first increase in 17 years. When Japan last lifted the sales tax to 5 percent from 3 percent in 1997, the economy fell into recession not too long afterwards.

__________________________________________________________________

Kyle Bass wins again...Akwad should have been listening to him instead of Big Ben or his professor

 

[rolltide]

[h=1]Sovereign Debt: Eroding Japan’s National Security[/h]Japan’s rising public debt has implications that go beyond its economy.

By Andrew Windsor
August 12, 2014

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The magnitude of Japan’s sovereign debt is an anomaly, and the subject of a great deal of debate in recent years. After all, few issues have attracted as much global attention lately as national debt. With many advanced economies possessing a public debt-to-GDP ratio hovering between 75 percent and 110 percent, how solid can Japan’s economic foundations be with its public debt north of 240 percent of GDP? On the face of it, this seems all the more worrying given that Greece, which required two bailout packages to keep from collapsing during the euro crisis, is the country with the next highest debt-to-GDP ratio at 152.5 percent. While certain factors have prevented Japan’s growing debt from wreaking immediate havoc, there are important connections to the greater security and stability of Japan that should encourage a more robust response from its government.
National debt if often cited in international finger pointing, in which it is frequently misconstrued as defining a nation’s immediate solvency and its fiscal responsibility. While these perceptions can have a powerful domestic political effect, the real risk of a nation’s sovereign debt depends on underlying factors that must be examined in context. In Japan, for example, has a yield on Japanese government bonds is stable at near zero. One might reasonably have expected the yield to increase to compensate holders of the bonds for the greater risk presumably associated with the larger debt burden, but this has not been the case. In fact, confidence levels remain relatively high.
One reason Japan’s sovereign debt hasn’t toppled its economy has been that much of it is held by domestic investors. High domestic savings, coupled with a relatively strong tendency towards domestic investment (known as home bias) has cushioned Japan against risks from fluctuations in currency markets. This is not, however, an infallible equilibrium. Overseas investors flocked to Japanese bonds in the wake of the euro crisis and then subsequently dumped them as the yen depreciated over the past year and a half.
In fact, rising national debt and deficits are not necessarily problematic in themselves. Countries responding to market shocks and emerging economies may run up deficits and public debt from influxes of foreign direct investment and government spending on public works. Also, like personal debt, sovereign debt is not likely to be owed all at the same time.
Still, Japan’s debt will eventually present problems if its growth continues unabated. Runaway national debt could trigger destabilizing economic consequences, such as rapid inflation, and could also creep into other areas of national sustainability. As it stands, Japan’s existing debt carries with it significant long-term risk and negative implications for multiple aspects of Japan’s national security.
First, uncertainty drives risk perception. Expectations, predictability and control, on the other hand, are methods policymakers employ to promote and maintain stability. Japan’s debt-to-GDP ratio is already a historical outlier, even in an era of expanding sovereign debt. Among the only other comparable examples areFrance after the First World War and Israel during the 1970s and 1980s, and these debt levels were driven, in part, by war. Both France and Israel were able to wrestle their crises under control within a decade through economic reform and confidence building measures. Japan, on the other hand, is nursing two decades of rapid debt expansion and is on track to surpass Israel’s unfortunate historical debt record.
At the peak of Israel’s debt crisis it was on the verge of repudiation, and although Japan’s current economy is surely in better shape to confront its liabilities than Israel’s was after the Yom Kippur War and 1983 crisis, an important takeaway should be that the two examples most similar to Japan’s current debt stature led their respective countries to the brink of economic collapse. Crossing that threshold removes all historical precedent from which to compare – at least among advanced economies. A movement into unknown territory means further uncertainty, potentially eroding fiscal confidence. This destabilization could possibly feed into runaway debt and inflation, which could be catastrophic to the Japanese economy.
Second, any catastrophe that befell Japan, the world’s third-largest economy would certainly have severe global ramifications, including the potential for irreparable harm to its economic soft power.
Third, an erosion of economic power directly translates into a loss of international political power – particularly for Japan. During Japan’s rapid economic expansion following its postwar reconstruction, Japanese foreign policy strategy was centered on building and exploiting its economic power while relying on the U.S.-Japan Alliance for traditional security support; a pragmatic evolution of the Yoshida Doctrine. Consider the implications of Japan being the second largest contributor to many international organizations: U.N. Peacekeeping Operations (10.83 percent), the IMF (6.461 percent quota shares and 6.135 percent voting shares), and the World Bank (8.57 percent of total, 8.13 percent voting power) to name a few. Monetary contributions determine to a significant degree the influence a country has over the policies of these organizations. Japan is also the fifth largest distributer of international aid (OECD). Meanwhile, the government of Shinzo Abe is pushing to revise the Charter of Japan’s Official Development Assistance (ODA) to allow the use of Japanese aid in distributing military assistance to foreign nations. However, since Japan’s economic crisis in the early 1990s its ODA disbursements have been following a slightly negative average trend. This is in contrast to the other top four contributing countries: the U.S., Germany, U.K., and France, which have seen a sustained period of overall ODA growth.
These examples are not just critical for purely economic reasons. There are far-reaching implications for other areas of security that rely on a strong economic foundation. Assistance given to regional neighbors and allies, for example, is directly linked to Japanese interests in maintaining regional stability and security. Japan also certainly has an interest in promoting domestic order in countries that have a significant Japanese business presence and large populations of Japanese expatriates. A perceived loss of economic confidence and relevancy from Japan’s international peers can also directly undermine diplomatic leverage in international politics vis-à-vis rival economic powers, frustrating foreign policy objectives.
This aspect of Japan’s national power base, developed during Japan’s economic heyday, has been decaying over the past twenty years. Japan’s two “lost decades” dragged its economy into perpetual stagnation. Meanwhile, China’s rapid economic growth has relegated Japan to third place among the world’s largest economies. Sustained increases in sovereign debt only limits Japan’s capacity to undertake various power-building endeavors. Although Abe’s effort to “normalize” Japan through constitutional revisions may have merit, economic influence is a powerful diplomatic tool that should be complementary to other national security apparatuses, not consigned to a secondary position.
Finally, domestic social and political opportunity costs are real. Money spent on one budgetary item is money unavailable for others. As Japan’s national debt growth continues to outpace overall economic growth, the cost of servicing the debt could create fiscal constraints that limit the ability to create and execute policy. For defense expenditures, for example, despite Abe’s increase of the defense budget last year, Japan has long maintained a defense spending rate hovering at (or slightly below) 1 percent of GDP (SIPRI Database), a self-imposed limitation that has historically enjoyed widespread support among the Japanese populace. Already a highly sensitive national issue, if the debt issue reaches a flashpoint, one of the first demands on the government will be to reign defense spending back in – regardless of what China is doing in the East China Sea.
Over the years, successive Japanese administrations have made ineffectual attempts to correct the country’s economic woes. The Abe government has been refreshingly comprehensive in its economic initiatives, known as Abenomics. The program consists of three “arrows”: (1) aggressive monetary policy; (2) expansionary fiscal policy; and (3) structural reforms. Confidence levels remain cautiously optimistic as the first two arrows have been let fly and appear to be achieving their desired results. It is the third arrow, however, that will make or break Abe’s economic legacy.
The economic growth promised by the third arrow’s reforms and growth strategies are critical for Japan. The proposed corporate tax cut is but a drop in the bucket, and Japan’s commitment to the Trans-Pacific Partnership is far from secured. One revenue-generating policy increased the consumption tax to 8 percent in April, with an additional hike to 10 percent slated for 2015. So far, all this has netted Abe is increasing flak from the increase in the cost of living. Any increase in tax revenue will have little impact on the sovereign debt if economic growth contracts; Japan needs significant long-term economic expansion. Abe and his administration must follow through on their promises of substantial structural reform.
While it is possible that Japan’s economy could continue running debts and deficits for decades to come, the inevitable result will be a slow and sad degeneration of what was once a highly competitive and vibrant economy – at one time expected to challenge the United States. Japan’s sovereign debt may not collapse on itself anytime soon, but left unchecked, it will continue to gnaw away at other important aspects of Japan’s national power and stability. From this vantage point, economic and political risks are worth taking for meaningful reform. In fact, despite the unpopularity of some recent policies (such as collective-self defense and the consumption tax increase), a growing desire among the Japanese public for visionary risk taking and a departure from business-as-usual politics is likely why Abenomics initially earned relatively high approval ratings for Abe’s administration. It was an uncommonly good start for a Japanese prime minister but economic growth and the resultant containment of the public debt must remain Abe’s first priority. The alternative, resignation to the status-quo, will only further undermine critical aspects of Japan’s national security and global interests.
Andrew Windsor is an international political and business consultant based in Washington D.C.

 

[Albatross]

Not at all. Never lied about a thing. Republicans these days are not the same republicans of the past. Give me Christie, Romney, or even GWB back and I'd be fine. The current party is purely anti-govt loons. Of course I'm going to be against them. Try to think a little bit. But you are best buds with Joe C, so I don't imagine you are intelligent enough to comprehend the different situations. You and Joe C should stick to birther threads. Economics, money, banking, etc are just too complex for you guys.

So you would vote for GW and Romney......but you think Obama is perfect? All over the map.

 

[Acebb]

You actually have to try to be as wrong as this dumb little Alaskan kid

JAPAN SAYS ECONOMY CONTRACTED 7.1 PERCENT IN 2Q

http://hosted.ap.org/dynamic/stories/A/AS_JAPAN_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-09-07-20-43-16

 

[SheriffJoe]

You actually have to try to be as wrong as this dumb little Alaskan kid

JAPAN SAYS ECONOMY CONTRACTED 7.1 PERCENT IN 2Q

http://hosted.ap.org/dynamic/stories/A/AS_JAPAN_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-09-07-20-43-16

That's because they're not spending enough! Austerity doesn't work! It's those damn conservatives in Japan and their failed ideology!

 

[Ricboff]

.
That region of the world is changing, China is having greater influence. With such economic prosperity comes a greater thirst for power. Japan does not have it easy going forward, for damn sure

http://www.japantimes.co.jp/opinion...sias-best-friends-shape-an-axis/#.VA3U_FV0w5s

good read, shortened version below,


Rarely before in recent years has Japan gone so much out of its way to welcome a foreign leader as it did when receiving India’s new prime minister, Narendra Modi (or NaMo to his fans), who started his tour from Kyoto

The rationale bringing Japan and India closer together is powerful: If China, India and Japan constitute Asia’s strategic triangle with unequal sides — China representing the longest side, Side A, India Side B, and Japan Side C — the sum of B plus C will always be greater than A. In the absence of a Japan-India axis, the rise of a Sino-centric Asia could become inevitable.
Containing China, however, is not an option. China is the largest trading partner of both Japan and India, which cannot afford to disrupt their relationship with Beijing. Nor are India and Japan seeking to forge a military alliance in which each will be obligated to come to the defense of the other.
The key issue for India and Japan is how to address Asia’s current power disequilibrium, which has arisen because of the rapid rise of an increasingly assertive China that is seeking to disturb the territorial and maritime status quo. An entente between Asia’s two main democracies can help restore a fair degree of equilibrium to the power balance.
Abe, 59, and Modi, 63, represent the best chance for Japan and India to establish such an entente. Ideologically, Abe and Modi are soul mates, sharing similar political values, including market-oriented economics, soft nationalism, a proactive foreign policy, and a new Asianism that seeks to promote a web of interlocking strategic partnerships among important democracies in the Asia-Pacific. The two belong to the 1950s generation, share the zodiac sign of Virgo, and regard each other as friends.
Indeed, like two buddies meeting after a long time, Modi and Abe greeted each other with an effusive hug and glowing and beaming smiles.
By contrast, Modi’s predecessor, the octogenarian Manmohan Singh, was a generation older than Abe, who greeted him with the customary handshake each time they met.
International-relations theory assumes that interstate relations are shaped by impersonal forces, especially cold calculations of national interest. In truth, history is determined equally, if not more, by the role of personalities, including their personal strengths and weaknesses and their search for national security and respect.
The Abe-Modi affinity has been fostered both by personal chemistry and hardnosed calculations about the importance of Indo-Japanese collaboration in their plans to revitalize their country’s economy and security and restore national pride. Modi’s personal rapport with Abe was built during his 2007 and 2012 visits to Japan as chief minister of the western Indian state of Gujarat.
In a reflection of their close bond, Abe follows only three people on Twitter: his outspoken wife Akie, author-turned-politician Naoki Inose and Modi. “I am eagerly awaiting your arrival in Kyoto this weekend,” Abe tweeted to Modi last Friday, declaring, “India has a special place in my heart.” Earlier, in a tweet in Japanese and English, Modi expressed “excitement” over his impending meeting with Abe, adding he “deeply respects” Abe’s leadership and “enjoys a warm relationship with him.”
Abe sees India as the key to expanding Japan’s security options beyond its current U.S.-centric framework, while Modi views Japan as the engine that can drive India’s “Look East” strategy to success. “Abenomics” and “Modinomics” are both geared to the same goal — reviving laggard growth — yet they need each other’s support for success.
Whereas Tokyo sees India as important to its own economic-revival strategy, India looks at Japan as a critical source of capital and commercial technology and a key partner to help upgrade its manufacturing and infrastructure.
India — the biggest recipient of Japan’s Official Development Assistance, which is currently funding more than 60 Indian infrastructure projects — has become the largest destination for Japanese foreign direct investment (FDI) among major industrialized nations.
The path is now opening up to Japanese exports of weapon systems and nuclear power equipment to India, the world’s largest arms importer and one of the few countries still wedded to building new commercial nuclear plants in the post-Fukushima era.
The two countries’ dissimilarities actually create opportunities to generate strong synergies through economic collaboration. Japan has a solid heavy manufacturing base, while India boasts services-led growth.
India has the world’s largest youthful population, while Japan is aging more rapidly than any other major developed country. Whereas Japan has financial and technological power, India has human capital and a huge market for goods and services.
Japan clearly has an interest in a stronger, more economically robust India. Just as Japan assisted China’s economic rise through large-scale aid, investment and technology transfers for over three decades — a role obscured by the flare-up of territorial and other bilateral disputes in recent years — it is ready to help India become an economic powerhouse on par with China.
China, by contrast, has little interest in aiding India’s economic ascent. Beijing boasts a booming trade with New Delhi, but that commerce bears a distinct mercantilist imprint and shows India in an unflattering light: China exports three times as much as it imports and treats India, like Africa, as a raw-material appendage of its economy. This asymmetry is made more glaring by China’s minuscule foreign direct investment in India.
The present pattern of Chinese companies merely exporting finished goods in increasing quantities to India is not sustainable. A challenge for Modi is to calibrate China’s India-market access to progress on bilateral political, territorial and water disputes, or else Beijing will fortify its economic leverage against New Delhi.
In fact, China makes not-so-subtle efforts to block the rise of India and Japan, including by stepping up military pressure on them and opposing the expansion of the U.N. Security Council’s permanent membership. Japan and India thus have a shared interest in working together to restrain China’s exercise of its rapidly accumulating power, which risks sliding into arrogance.
The Japan-India relationship — characterized by “only good will and mutual admiration,” in Modi’s words — holds the potential to catalyze the two countries’ emergence as world powers while reshaping Asian geopolitics and instituting power stability.
The process to tap that potential is just beginning. Modi urged that the two countries should “strive to achieve in the next five years their relationship’s unrealized potential of the last five decades.” To that end, India and Japan have established a special new mechanism — a two-plus-two consultative framework on diplomacy and defense involving their foreign and defense ministers together.
Modi’s watershed visit has not only helped to define the parameters for closer Indo-Japanese collaboration through landmark accords but also sets in motion the addition of concrete strategic content to a relationship embodying Asia’s emerging democratic axis.

 

[rolltide]

more perfection - revised to -7.1% from -6.8%

...and crickets from Mr Racism, of course. only people that couldn't see this one coming were Akhole and his professor

Japan second-quarter GDP shrinks 7.1 percent, adds to doubt over inflation goal

By Leika Kihara
TOKYO Mon Sep 8, 2014 6:16am EDT


(Reuters) - Japan's economy shrank an annualized 7.1 percent in April-June from the previous quarter, worse than a preliminary estimate, and adding to doubts over whether the central bank can achieve its target of 2 percent inflation early next year.
The contraction was the biggest since January-March 2009, when the global financial crisis hit Japan's exports and factory output, and some analysts now expect the economy to barely grow in the current fiscal year to March 2015.
The weak performance following a sales tax hike in April will keep the Bank of Japan and Prime Minister Shinzo Abe's government under pressure to expand fiscal and monetary stimulus in order to lead the economy out of a long deflationary phase.
"Growth this year will be less than what policymakers are expecting. The BOJ will ease policy in April because inflation will be too low to meet its target," said Takuji Aida, chief economist at Societe Generale Securities.
GDP was revised down from a preliminary 6.8 percent drop, according to Cabinet Office data released on Monday, and was more than the median market forecast for a 7.0 percent decline in a Reuters poll of economists.
The revision was largely due to a bigger than expected fall in capital expenditure and a deeper decline in consumer spending, suggesting the economy could struggle to overcome the April sales tax increase.
The weakness in capital expenditure casts doubt on the BOJ's expectations that companies, which saw revenues rise thanks to the stimulus policies undertaken so far, will boost investment and hiring.
The central bank has said consumer inflation will head toward its 2 percent target as long as the economy grows above its potential, considered around 0.5 percent. The latest data suggested that was in the balance, with several analysts expecting even more minimal growth.
"Recent data have been weak overall, and the economic recovery has been slower than projected," said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute, who expects the economy to stay flat this fiscal year.
Takeshi Minami, chief economist at Norinchukin Research Institute, also cut his projection to 0.2 percent growth for the current fiscal year, citing sluggish capital spending.
"Inflationary pressure will weaken reflecting sluggish economic growth," he said. "At some point, the government and the BOJ will have to take some steps (to revive growth)."
In its latest forecast issued in July, the BOJ expects the economy to expand 1.0 percent in the current fiscal year, more than the 0.4 percent increase forecast in a Reuters poll last month. The bank is set to cut that projection at its next review its long-term projections in late October, sources have told Reuters.
SENTIMENT WORSENS
Adding to the gloom, Japan's service sector sentiment worsened for the first time in four months in August as bad weather kept consumers at home.
Policymakers had foreseen that the economy would shrink in the April-June quarter as consumers withheld spending after a shopping spree ahead of the sales tax hike to 8 percent from 5 percent on April 1.
But their forecasts of a moderate recovery in the current quarter, have looked increasingly over-optimistic in light of a run of weak data, including a slump in household spending and tepid output growth in July.
Whether the economy has picked up since then will be crucial to Abe's decision, expected by year-end, on whether to proceed with a scheduled second increase in the sales tax to 10 percent in October next year.
Exports were starting to recover and as long as the economy expands in July-September, Abe is likely to go ahead with the second increase, Societe Generale's Aida said.
But he also expected the government to launch a fiscal stimulus package to offset the tax hike's impact on growth.
If the economic recovery falters, it will also heighten pressure on the BOJ to expand the already massive monetary stimulus that it deployed in April last year.
The BOJ, which kept monetary policy steady on Thursday, remains unfazed so far by the soft data, arguing that the pain from the tax hike is temporary, with household spending set to pick up as a tightening job market pushes up wages.
BOJ Governor Haruhiko Kuroda has also expressed confidence the bank can meet its inflation target sometime in fiscal 2015, but many private-sector economists say it will take longer.

 

[rolltide]

Ha Ha, Abenomics is so perfect Japan is contemplating stopping the madness at stage 2 (of 3). Of course I hope they don't or the forum fool will just say the reason it didn't work is they didn't see the chaos through to it's obvious conclusion...

[h=1]‘Abenomics’ at risk as firms put brakes on spending, hoard their cash[/h][h=5]BY FINBARR FLYNN AND TESUN OH[/h]BLOOMBERG

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Japanese companies from NTT Docomo Inc. to Honda Motor Co. are putting the brakes on spending as they pile up cash, showing the challenge Prime Minister Shinzo Abe’s new Cabinet faces in reviving the economy.
Capital expenditure growth by nonfinancial companies will slow on aggregate to 1.3 percent next fiscal year from an estimate of 7.9 percent this year, according to a Moody’s Investors Service study of rated companies. Firms on the Topix share index boosted cash by 10 percent to ¥68.5 trillion ($650 billion) in the past year, Bloomberg-compiled data show.

“Companies are piling up cash because they remain cautious,”

Honda, Japan’s No. 3 automaker, plans to cut capital outlays 10 percent this fiscal year, while NTT Docomo, the nation’s largest mobile-phone carrier by subscribers, forecasts spending will drop about 2 percent. Even as companies take advantage of decade-low bond yields to sell longer-term debt and refinance at lower costs, total issuance of corporate notes has decreased 16 percent so far this year.

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[h=1]Close Abe adviser calls for delay to next tax hike if economy slows[/h]KYODO

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The Abe administration should put off the consumption tax hike scheduled for next year or raise the rate by 1 percentage point per year if the economy stalls, according to a special adviser to the prime minister.

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[h=1]‘Abenomics’ appears headed for trouble as challenges build[/h][h=5]BY LINDA SIEG AND TETSUSHI KAJIMOTO[/h]REUTERS

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Prime Minister Shinzo Abe’s plan for the economy to generate self-sustained growth on the back of his three policy “arrows” of massive monetary easing, spending and reform appears to be faltering — but no magic solution is in sight.
Abe’s aides and advisers are promising to forge ahead with painful structural reforms while spreading the benefits of “Abenomics” to regional areas and drafting a long-term vision for addressing Japan’s shrinking population.
But gloomy economic data suggests the plan is not succeeding as hoped and the only short-term contingency plans appear to be further central bank stimulus or delaying a second rise in the consumption tax set for October 2015.
“Abenomics is in trouble — because it’s not happening fast enough,” said Robert Feldman, head of research at Morgan Stanley MUFG, who like many others says Abe must move faster on steps such as labor market reform to boost productivity.
Failure could leave the economy stuck in a low-growth mode or worse, unable to begin to curb public debt already more than twice the size of the economy, the biggest burden in the industrialized world.
Abe’s public support, now at around 50 percent, depends heavily on the economy. Most voters favor delaying next year’s sales tax rise to 10 percent after the initial hike in April to 8 percent dented a fragile recovery.
“Will raising the sales tax a second time just when the economy is moving toward recovery really be a plus for the people’s livelihoods?” Koichi Hagiuda, an aide to Abe in the Liberal Democratic Party, wondered out loud in an interview.
“But there is also a risk to postponing it. Might not Japan lose the confidence of international society?” Hagiuda added.

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[h=1]Richard Katz on the failures of ‘Voodoo Abenomics’[/h][h=5]BY JEFF KINGSTON[/h]SPECIAL TO THE JAPAN TIMES

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  [*=left]AUG 30, 2014ARTICLE HISTORY
  
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Richard Katz, editor-in-chief at The Oriental Economist, is the author of “Voodoo Abenomics: Japan’s Failed Comeback Plan,” an article published in the July/August issue of Foreign Affairs magazine. Katz went into more detail about Prime Minister Shinzo Abe’s “Abenomics” policy in a recent email interview with The Japan Times.
In your article you open by focusing on key changes in the labor market. What happened and what are the implications?
Irregular workers have risen from about 15 percent of the labor force in the 1980s to 38 percent today. These are part-timers and temporaries who often get paid a third less per hour, work fewer hours per month and don’t get bonuses and other benefits. Because even a firm in trouble finds it legally very hard to lay off permanent workers, they prefer to hire irregulars. The result is a continued drop in consumer spending power. Moreover, it worsens Japan’s demographic crunch. Whereas 70 percent of Japanese men in their 30s with regular jobs are married, among irregular workers in their 30s, that percentage plunges to just 25 percent. Abe has done nothing to address this problem. In fact, so far, all of the job growth under Abe has been in irregular employment.
Does the tight labor market suggest things are improving?
The market is not as tight as it looks. People point to the figure of 1.1 job offers for every applicant. However, in April, the opening-to-applicant ratio for part-time workers was 1.4, while the ratio for full-time regular workers was just 0.95. With real wages continuing to fall, there is not enough consumer purchasing power either to drive growth or reach the 2 percent inflation target.
You argue that Abenomics is a con game. How so?
Abe argues that the root cause of Japan’s malaise is lack of confidence. If Japanese had more faith in their country’s prospects, then consumers would spend more and companies would do more investing and hiring. That is wrong. The malaise stems from problems in reality, not in psychology.
And it is a con game, in the sense that most of the so-called third arrow of structural reform is just nice-sounding targets with no strategies to realize them.
What about Abe’s recent structural-reform proposals?
We have seen serious reforms in Japan before: the change in the Large-Scale Retail Store Law, the “Big Bang” financial reforms, the cleanup of nonperforming loans, the telecom reforms — so, we know Japan can reform. But nothing Abe has done looks anything like those.
He could pass a law to equalize the wages of regular and irregular workers. He could act against the malfeasance of the nuclear utilities so as to reverse the well-deserved distrust of these companies’ handling of nuclear power. Japan cannot grow well without enough energy. He could remove Japan Agriculture’s exemption from the Anti-Monopoly Act, which enables it not only to maintain high prices on food, but to act as a nucleus for the anti-reform forces in Japan. He could enforce the act when firms use their bargaining clout with distributors and retailers to keep competitors from gaining access to the market and challenging them. Growth in any economy depends on the exit of inferior firms and entry of new, better firms, but Japan has the lowest rate of firm turnover among major rich countries.
Why is Abenomics sputtering?
If Abe were indeed executing all three arrows — monetary stimulus, fiscal stimulus and genuine structural reform — then Abenomics would work. But Abe has, in fact, just one arrow: monetary stimulus. The problem is that none of the three work without the other two. For example, instead of pursuing fiscal stimulus until Japan reaches recovery, and then working on the deficit, Abe is enforcing austerity via tax hikes. That renders monetary stimulus impotent.
Has Abe missed his chance to advance significant structural reforms?
Because of the failures of Abenomics, Abe’s approval ratings keep falling. That, in turn, is steadily depriving him of the clout necessary to overcome vested interests, even if he wanted to.
Abe’s recent rural-revitalization proposals have been panned as rehashed, old-style pork-barrel projects from the Liberal Democratic Party that are aimed at local elections next year. What’s your read?
I agree. His previous moves on agricultural reform were supported by Japan Agriculture, precisely because it had little content. While Abe’s own Council on Regulatory Reform recommended abolishing Japan Agriculture, Abe refused.
You wrote: “Trying to cure Japan’s malaise by generating inflation is like trying to cure a fever by putting ice on the thermometer.” What did you mean by this?
Deflation is not the cause of Japan’s problems; it is just a symptom. It’s primarily a symptom of weak domestic private demand. That, in turn, is the result of anemic consumer income. Without commensurate wage hikes, inflation can make things worse. In June, due to hikes in prices and the consumption tax, real price-adjusted income for worker-headed households was down 6 percent from 2013.
So what should be done?
The first step is to combine (Bank of Japan Gov. Haruhiko) Kuroda’s monetary stimulus with fiscal stimulus. That means postponing the consumption-tax hike. It also means increasing spending on the kind of public works that actually help the economy long-term while providing short-term stimulus. This fiscal-monetary combo would help restore the economy to full employment and full capacity and provide a cushion for the parts of the third arrow that will cause a loss of jobs in some backward sectors. The social safety net has to be improved to protect workers as they move from job to job. Japan should truly reform its electoral districts so that rural and urban voters have an equal say. That would strengthen pro-reform voices. Working on the chronic budget deficit should follow, not precede, economic recovery.
Does Abenomics bolster the prime minister’s “womenomics” policy?
No. Another violation of the truth-in-advertising laws by Abe. One of the biggest problems for women is pressure to leave the career track once they get married or become pregnant. Japan needs a situation in which women can have both careers and children. Abe has not even addressed this issue beyond tokenism.

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[rolltide]

[h=1]The Wrath of Abenomics Crushes Japanese Consumers, Eviscerates Economy[/h][h=2]by Wolf Richter • September 8, 2014[/h]

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In April, after the broad-based consumption-tax hike from 5% to 8% had taken effect, retail sales collapsed 20% from March. Total vehicle sales collapsed 56% to the worst level since December 2012, and December is usually the worst month of the year in Japan. April was terrible. It was much worse than feared by the Abenomics soothsayers and apologists.
But the shock didn’t last long, and soon the soothsayers and apologists were at it again. In May, car sales were worse than a year earlier, but not much worse (-1.2%); and in June, car sales were actually a smidgen better (+0.4%) than a year earlier, and hopes were being propagated that this would all somehow work out. But in July sales dropped 2.5% year over year, and other data points were going to heck as well.
Then August happened.
In August, vehicle sales as measured by registrations swooned, according to the Japan Automobile Manufacturers Association. All categories were down: sales of new cars, including minis (tiny cars with tiny engines), plunged 9.4% year over year to 281,326 units; sales of new trucks of all sizes including minis dropped 7.2% to 51,165 units. And total vehicles sales, retail and commercial, cars, trucks, and buses plunged 9% to 333,471 units.
It was worse even than that terrible April, though in recent years, August had beenbetter than April. It was worse even than December 2012. It was the worst month since August 2011, the time when the consequences of the Great East Japan Earthquake and tsunami that had killed over 19,000 people were still paralyzing Japanese commerce, and when countless aftershocks were still rattling buildings and nerves on a daily basis:

Most of the vehicles sold in Japan are made in Japan, the single most protectionist auto market in the world, despite decades of screaming by US automakers. So the decline in sales isn’t distributed in part over importers and their plants in other countries. Instead, it’s going to hit mostly Japanese production.
Abenomics soothsayers and apologists are worried. The August debacle is hard to explain away, even for them. It just sits there, a nagging, dark reality. And reality is that Abenomics is coming home to roost.
One of the key elements of Abenomics is an all-out effort to stir up inflation. And grudging respect is due Prime Minister Shinzo Abe and his ilk for using the printing press of the Bank of Japan to accomplish that lofty goal. They’ve been successful.
Goods inflation in July jumped 4.3% year over year, with vendors passing on a big part of the tax hike to consumers. Service inflation was up only 1.7%, indicating that service providers, also covered by the consumption tax, have eaten the tax hike and absorbed it in their margins rather than passing it on to their customers, at least for the time being. Which will cut into their profits, and into their ability to grow and invest and spend and pay their employees more – and thus into their ability to push the economy forward.
And inflation in August? The Statistics Bureau uses inflation in the Tokyo area for an early indicator of what inflation might look like a month later for the country as a whole. And in August, year-over-year goods prices in the Tokyo area jumped 5.1%.
Price increases of this type leave skid marks on consumers. Unless compensation moves up in parallel, the consequences are clear.
Alas, compensation has done the opposite. It has declined further. The Statistics Bureau reported that the average of monthly household income in July dropped 2.4% before inflation from the previous year – and plummeted 6.2% in real terms. Inflation without compensation.
So the hapless Japanese consumers are in the nightmarish situation of having to watch how the government that they themselves elected into power is executing its plan that had been part of its election platform. That plan is now destroying their earnings power and their life savings at a rate that middle-aged Japanese have only read about in history books.
So they didn’t just cut back on car purchases. In July, average consumption expenditures per household of two or more people – which comprises the vast majority of households, including households on fixed incomes, such as retirees – dropped 2.0% in nominal terms from a year earlier. Adjusted for inflation, consumption expenditures plunged 5.9% (hair-raising chart).
The wrath of Abenomics – inflation without compensation – has been slamming into these consumers month after month with relentless regularity. Inflation mongers should be ecstatic. Their wildest dreams are coming true. But as auto sales and consumption expenditures have shown, and as numerous other data points have shown, and as the just downwardly revised 7.1% plunge in GDP last quarter has shown, this strategy is terrible for the Japanese people, and it’s crushing the economy.
The three infamous arrows of Abenomics – promise, hype, and hope – that came with a mega-bout of money-printing by the Bank of Japan and tax cuts for Japan Inc. hit their victims and produced propitious results.

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[h=1]Abenomics Goes to Heck, in one Chart[/h][h=2]by Wolf Richter • August 13, 2014[/h]

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Japan’s economy has had, let’s say, its ups and downs. The big recent downs were triggered by the financial crisis in 2008 and by the earthquake and tsunami of March 11, 2011. Both were met with stimulus packages and all manner of rebates and incentives that drove up the deficit and goosed the economy, only to leave a hole when they eventually wore off.
But since 2013, Japan has Abenomics – and its three arrows: promise, hype, and hope. It came with a huge bout of money-printing by the Bank of Japan, tax cuts for businesses, and a very broad-based consumption-tax hike to hit households the hardest.
It was passed by the prior government that was subsequently kicked out because of it. No one in Japan wants to pay for what the government actually spends. So the current rule is that only about half of government spending is collected in taxes, the other half is borrowed. Hence the insurmountable and rapidly growing pile of debt.
Abenomics had its moments. At first, given the soaring stock market and the feel-good atmosphere, the economy perked up, growing in the first half of calendar year 2013 at a nice clip. Then stocks tanked, optimism faded. Promise, hype, and hope were replaced by reality and by “inflation without compensation.” Hence near stagnation in the second half of 2013.
Then a miracle happened: The effective date of the consumption tax hike, April 1, the beginning of Japan’s fiscal year, moved closer and triggered a historic bout of frontloading by consumers and businesses alike. In an environment where money in low-risk investments earned nothing, and where inflation was rising, the government had handed consumers and businesses a way to save 3% at every major purchase. It’s like 3% risk-free income. For households, it was tax-free! Frontloading turned into a frenzy. And GDP jumped 1.6% in the January-March quarter.
It was the finest moment of Prime Minister Shinzo Abe’s regime, and Abenomics apologists scattered across the globe, praising his endless wisdom.
Then in the April-June quarter (Q1 in Japan), a terrific hangover set in. More than a hangover.
GDP plunged 1.7% from prior quarter, an annual rate of -6.8%, the Cabinet Officereported. It was the worst decline since January-March 2011 when the earthquake and tsunami on March 11, and the subsequent triple meltdowns at the Fukushima nuclear plant, nearly brought the Japanese economy to a halt, freezing up supply chains and transportation systems. Thousands of aftershocks, some of them serious earthquakes in their own right, continued to wreak havoc for months. Electricity was in short supply…. Those were terrible months. During that tragic quarter, GDP plummeted 1.9%.
That GDP in the April-June quarter this year was just two notches less terrible (-1.7%) is a sign that it wasn’t just a hangover from a bout of frontloading. It ate up not only the entire growth of the January-March quarter (+1.6%) but also half of the growth of the September-December quarter (+0.2%).
It’s not a pretty picture:

Note the sudden impact of the stimulus after the earthquake in 2011, followed by its big fade that lasted four quarters. That’s how stimulus works.
Then, in the first half of 2013, the beginning of the Abenomics era, the economy got high on promise, hype, and hope and on money-printing. In the second half, reality set in, and the economy languished. And so far in 2014, the net effect of frontloading and hangover is that GDP has actually declined.
The last quarter was ugly throughout. Consumption by households dropped 5.2%, and excluding “imputed rent,” 6.2%. Consumers drastically cut back on buying big-ticket items and confronted steep price increases while their incomes stagnated. Private residential investment plunged 10.3%. Only government consumption ticked up.
But that’s not the whole story to the GDP fiasco: Imports had soared during the quarter, compared to the same period a year earlier, while exports limped along. So the trade deficit for the quarter ballooned by 23.6% year over year. Trade deficits reduce GDP, and in the already terrible quarter, it was a hit below the belt.
The trade deficit had nothing to do with the consumption tax hike. Rather it is an ongoing, relentlessly deteriorating debacle. Rising exports and trade surpluses have always been vital to Japan. And reconstituting them is a cornerstone of Abenomics. But that plan has totally gone to heck.

 

[rolltide]

update on perfection:

Japan Q3 GDP forecasts cut, inflation stuck below BoJ target

TOKYO: Japan's economy is likely to rebound less than previously expected this quarter, while inflation will stay below the central bank's target well into the future, a Reuters poll showed, compounding worries about the sputtering recovery.


Economists in the Reuters poll trimmed their forecasts for July-September growth after the economy took a bigger hit than expected in the second quarter from a sales tax increase in April. This quarter's rebound is vital for policymakers.

In the fourth straight cut to the forecast for the fiscal year to March, the analysts predicted growth of 0.3 percent, down from 0.4 percent projected last month. In May, they were forecasting 1.0 percent growth.

Japan’s cabinet office Friday downgraded its assessment of the economy as the yen has weakened to six-year lows against the dollar.
w-thumbs!^

 

[Willie99]

RT kicking ass and not taking any prisoners

scum is on the ground, blood flowing from every natural and man made body opening, yet he lays there are the ground talking shit. Can't lift his broken arms, can't stand on his legs suffering from compound fractures, yet he keeps talking shit and telling lies as his words gurgle from his mouth while he's spitting up blood

he cites a massive economic failure as proof the idiocy he espouses is a success

at the end of the day, Japan will evolve out of it's lost generation, but it won't be because big government saved the day

has anyone ever met a more delusional person? any where? any time? maybe even when dreaming? maybe when watching a movie?

it reminds me of TR arguing the WTC wasn't occupied on 9/11, all those deaths were a Hollywood production. It's that bad, he's that stupid

 

[SheriffJoe]

Time doing its thing again. puff_>>

 

[Dave007inVegas]

Time doing its thing again. puff_>>

Time is the ultimate killer.

 

[rolltide]

well at least abenomics is reaching it's intended goal of shrinking japan's trade deficit, right?

One of the most important goals of Japan’s newfangled, democratically elected economic religion is to stimulate the economy for Japan Inc., if for no one else, by boosting exports (by making them cheaper overseas) and curtailing imports (by making them too expensive in Japan). To get there, Prime Minister Shinzo Abe and the Bank of Japan have agreed to water down the yen, and thus the wealth and earnings power of the Japanese.
To execute that noble strategy, the BOJ went on a money printing binge. It worked: the yen has dropped over 30% to the dollar since the election campaign in late 2012. It accomplished all sorts of goals: the yen-denominated wealth of the Japanese was cut by over 30%, real wages were cut as well, the economy is in shambles….
The one thing it hasn’t accomplished is the original goal of increasing exports and lowering imports, thus creating that all-important trade surplus that would goose GDP and make Abe and the Bank of Japan smell like a rose. The Ministry of Finance sprinkled salt on the wound today with the trade statistics for August.

Exports, instead of soaring due to the watered-down yen, dropped 1.3% from a year ago to ¥5.7 trillion. Imports edged down 1.5% to ¥6.7 trillion, mostly due to petroleum imports, the largest category, which fell by 5.2% based on the lower price of oil on the world markets. This alone contributed 0.9 percentage points to the 1.5% drop in imports. The other factor: consumers, squeezed by higher prices and declining real incomes, have been curtailing consumption. As a result, the goods trade deficit inched down 2.4% to ¥948 billion.
For the first eight months, compared to the same period last year, the trade deficit soared 39%! Here is what the impact of Abenomics on trade looks like, boiled down to one chart:


August 2014 faced that terrible August 2013, which had produced the worst August trade deficit in the history of Japan. It had been 27% worse than the prior worst August trade deficit (2012). So the accomplishment this year was that the trade deficit wasn’t even worse. And the reason it wasn’t even worse wasn’t due to soaring exports (which declined), but falling imports based on a lower price of oil and lower consumption by strung-out Japanese consumers.
The report also points at struggling economies: Exports to all other Asian countries combined declined 0.6% year over year. That includes declines of exports to China and Hong Kong (-0.2% and -1.6%), South Korea, which has announced a stimulus package to counter the slowing economy (-6.1%), Thailand (-4.3%), and Indonesia (-14.8%).
The trade deficit is a consequence of offshoring by Japan Inc., for two reasons: the search of cheap labor and a desire to be closer to their customers. That shift lagged behind the efforts in the US, but accelerated after the 3/11 earthquake and tsunami, when supply chains in Japan collapsed. Abenomics has given Japan Inc. new incentives to offshore: the watered down yen allows them to translate profits from foreign operations into weaker yen, thereby performing miracles on their financial statements. So the trade deficit will remain a drag on the economy.
And that economy doesn’t let up dogging Abenomics. Even Abenomics soothsayers and apologists are worried: the August debacle is hard to explain away, even for them.

 

[festeringZit]

AkPedPhile getting his ass handed to him in this thread too... How embarrassing.

 

[SheriffJoe]

Just like akphidelt-onomics, this thread is the epitome of perfection.