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cashinmattress

Japanese Economy Collapses

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Confirming once again that Wall Street economist (and sell side in general) is the most useless profession in the world (though gladly accepting a 7 figures compensation), is the latest data out of Japan which is yet another stunner to most, as nobody, nobody, could have possible predicted that the Japanese economy would literally fall off a cliff in Q1, plunging at a 3.7% rate (down from -3% previously), which is double the consensus print of -1.9%. DOUBLE. And in nominal terms the collapse was simply epic: -5.2%! And yes, this is officially a recession. Of course, anyone reading Zero Hedge would have been perfectly aware of this outcome. 4 short days ago we said: "Increasingly we have come to believe that the real marginal economy over the next several quarters will be neither that of the contracting US, nor that of the rapidly tightening, yet still very much inflationary China, but the (arguably) third largest one: that of Japan." Today our prediction is more than confirmed. And instead of hiding deep in the whatever holes these morlocks cralwed out of, Bloomberg for some inexplicable reason continues to look to their blatantly horrendous opinion. “The negative economic impact from the disaster will be on full display during the second quarter,” Hiroshi Watanabe, a senior economist at the Daiwa Institute of Research in Tokyo, said before the report. “This recession may be deep, but short.” Yeah, sure. Short. We'll just hold our breath. And for it to be short, it means that the BOJ will be forced to print a few hundred trillion in Yen asap (just as we predicted here and here) right? Which in turn means that the USDJPY will surge and shift the Japanese recession even faster over to the US. And yes it means that the turbo print button among the central banks will get the F5 treatment as the second round of currency devaluation completes a lap.

Some more much delayed reality:

Highlighting the disaster’s effect on companies, Toyota Motor Corp. said profits plunged while Nippon Steel Corp. reported its first net loss in six quarters, after the quake closed plants, cut supply chains and caused power shortage.

Factory output fell by a record and retail sales and exports declined in March because of power shortages spurred by a nuclear accident in Fukushima, northeast of Tokyo, and damage to transportation facilities after the temblor.

“It’s hard to think that companies will become aggressive about increasing business spending when uncertainties remain strong,” said Junko Nishioka, chief economist at RBS Securities Japan Ltd. in Tokyo. “Capital spending will likely be in a declining trend as corporate profits may do worse than expected.”

Capital investment dropped 0.9 percent in the first quarter, the first decline in six quarters, today’s data showed.

Consumer spending fell 0.6 percent in the January-March period from the previous three months, today’s report showed.

But since the conspiracy of optimism needs its daily fix, there is of course a hopey-changey silver lining:

“We look for a classic V-shaped recovery in the July-to- September period and after,” said Kyohei Morita, chief economist at Barclays Capital in Tokyo. “A self-sustaining recovery in production, an increase in government consumption and reconstruction demand centered around public works will likely support the economy.”

Frontal lobe bleeding may now commence.

And let's not forget, Japan is the #2 holder of US paper.

So long, it was nice knowing you...

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Would/could this be a Black Swan?

The trigger for an "event" would probably be a massive repatriation of Japan's overseas holdings which would cause huge amounts of JPY buying and ROW (rest of the world) selling. Could happen but I think that they learned how to manage the problem and markets better after the Kobe quake.

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The trigger for an "event" would probably be a massive repatriation of Japan's overseas holdings which would cause huge amounts of JPY buying and ROW (rest of the world) selling. Could happen but I think that they learned how to manage the problem and markets better after the Kobe quake.

Cheers LuckyOne

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These figures were not good. However some think that these poor growth figures may be by no means the end of the problems for Japan.

Japan is in Recession

This morning the economic growth figures for Japan in the first quarter of this year were released and they were very poor showing a decline of 0.9% on the quarter or if we use the American annualised system a fall of 3.7%. These were much worse than expected – are economists expectations ever right these days? I will do a post on this-and show us the impact of the tsunami,earthquake and nuclear disaster on Japan as they only affected just over two weeks of the quarter.

When this happened I pointed out how extraordinarily optimistic many forecasts were and how they appeared to defy reality. Well this morning many of the same individuals seem to be playing double or quits as they brush over their errors so far and tell us that the economic future is bright for Japan. To my mind the brightness will not come from electric light for as I have pointed out this week already Japan’s electricity supply capacity is down by 12.5% and as her summers can be humid and hot we are heading into a possible peak for demand.

I would like to wish Japan and her people well but I fear for what the figures will show in the second quarter.

http://t.co/Q293vgv

No doubt the mainstream media will be full of articles telling us that everything is ok and that the recovery is already underway!

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Apparently only a few (about 10) japanese cars are given radiation (geiger counter) testing per export shipment. I imagine each shipment could mean hundreds of cars.

So they're expecting everybody along the sales and distribution lines and especially vehicle purchasers all over the world to take any radiation risk from all of the untested cars themselves.

In due course in future years that'll apply to buyers of 2nd hand japanese vehicles as well as when they are all scrapped and the scrap metal etc turned to other use.

Then there's all the other stuff they export.

Edited by billybong

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Apparently only a few (about 10) japanese cars are given radiation (geiger counter) testing per export shipment. I imagine each shipment could mean hundreds of cars.

So they're expecting everybody along the sales and distribution lines and especially vehicle purchasers all over the world to take any radiation risk from all of the untested cars themselves.

In due course in future years that'll apply to buyers of 2nd hand japanese vehicles as well as when they are all scrapped and the scrap metal etc turned to other use.

Then there's all the other stuff they export.

Could you please keep this drivel in the 'Explosion at Fukushima' thread where it is easier to ignore?

Ta.

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Apparently only a few (about 10) japanese cars are given radiation (geiger counter) testing per export shipment. I imagine each shipment could mean hundreds of cars.

So they're expecting everybody along the sales and distribution lines and especially vehicle purchasers all over the world to take any radiation risk from all of the untested cars themselves.

In due course in future years that'll apply to buyers of 2nd hand japanese vehicles as well as when they are all scrapped and the scrap metal etc turned to other use.

Then there's all the other stuff they export.

Apparently two shipments of cars were held in Russia due to radiation levels being 2 times over the allowed limit.

With everything else it's all going to add up to a severe impact on the Japanese economy.

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Only to the brainiac's at Wall Street/the city/canary wharf by the sounds of it.

To everyone else, its yesterdays news.

Yeah. The wife phoned her parents this morning, the news is all about who has bought a new benz, designer bags and who has died. The earthquake has been forgotten about.

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  • 311 Brexit, House prices and Summer 2020

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      • down 5% +
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