Home » Posts tagged 'japan'

Tag Archives: japan

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Olduvai
Click on image to purchase

Olduvai II: Exodus
Click on image to purchase

Olduvai
Click on image to purchase

Olduvai II: Exodus
Click on image to purchase

Olduvai
Click on image to purchase

Olduvai II: Exodus
Click on image to purchase

Olduvai
Click on image to purchase

Olduvai II: Exodus
Click on image to purchase

Olduvai
Click on image to purchase

Olduvai II: Exodus
Click on image to purchase

Olduvai III: Cataclysm
Click on image to purchase

Whose Private-Sector Debt Will Implode Next: US, Canada, China, Eurozone, Japan?

Whose Private-Sector Debt Will Implode Next: US, Canada, China, Eurozone, Japan?

Canadians, fasten your seat-belt. Here are the charts.

The Financial Crisis in the US was a consequence of too much debt and too much risk, among numerous other factors, and the whole house of cards came down. Now, after eight years of experimental monetary policies and huge amounts of deficit spending by governments around the globe, public debt has ballooned. Gross national debt in the US just hit $20.5 trillion, or 105% of GDP. But that can’t hold a candle to Japan’s national debt, now at 250% of GDP.

And private-sector debt, which includes household and business debts — how has it fared in the era of easy money?

In the US, total debt to the private non-financial sector has ballooned to $28.5 trillion. That’s up 14% from the $25 trillion at the crazy peak of the Financial Crisis and up 63% from 2004.

In relationship to the economy, private sector debt soared from 147% of GDP in 2004 to 170% of GDP in the first quarter of 2008. Then it all fell apart. Some of this debt blew up and was written off. For a little while consumers and businesses deleveraged just a tiny little bit, before starting to borrow once again.

But the economy began growing again too, and debt as a percent of GDP fell to a low 148% in Q1 2015. It has since picked up steam, growing once again faster than the economy, and now is at 151.7% of GDP, back where it was in 2005. This chart shows US private sector debt to the non-financial sector, in trillion dollars (blue line, left scale) and as a percent of GDP (red line, right scale):

…click on the above link to read the rest of the article…

US to Import Inflation from Japan, China, South Korea

US to Import Inflation from Japan, China, South Korea

Even from Japan – whose export producer prices are soaring.

The oil price collapse that started in 2014 pushed down input costs that companies – the “producers” – faced. And producer price indices, which measure inflation further up the pipeline, plunged. But this is over. And the biggest export powerhouses in Asia that have ballooning trade surpluses with the US, show how.

The Producer Price Index in Japan – the “Corporate Goods Price Index,” as it’s called there – jumped 3.4% in October compared to a year ago, after already climbing an upwardly revised 3.1% in September, the Bank of Japan reported on November 13. It was the tenth month in a row of year-over-year gains and the highest annual rate since September 2014, by which time the collapsing energy prices were mopping up any inflationary pressures (chart via Trading Economics):

On a monthly basis, the index rose 0.3% from September. But excluding “extra charges for summer electricity,” the index jumped 0.6% month-over-month.

The biggest movers: Nonferrous metals prices soared 22.4% year-over-year, petroleum and coal products 15.8%, iron and steel 9.7%, and chemicals and related products 3.6%.

On the negative side of the ledger there wasn’t much activity: prices for electrical machinery and equipment edged down -1.1%, for business oriented machinery -0.4%, and production machinery -0.3%.

Export prices in October jumped 9.7% year-over-year in yen terms and 3.8% in contract-currency terms. Export prices of Metals and related products soared 25.8% in yen terms and 17.7% in contract-currency terms. Chemical and related produces soared 16.3% and 11.8% respectively. Other primary products and manufactured goods prices jumped 10.3% and 4.2%. All three of them soared in double-digit percentages just from September!

Japan has exported $101 billion in goods to the US so far this year.

…click on the above link to read the rest of the article…

Is Korea Just a Smokescreen?

Is Korea Just a Smokescreen?

In my last article (Sticking the arson charge on a couple of patsies) I questioned why North Korea’s nuclear program was attracting such attention from the United States. North Korea is a very poor and backwards country whose bellicosity reflects the regime’s need for an external enemy like the United States to galvanize domestic support. Attacking America and its allies in the region is the last thing North Korea’s leaders would want to do as such an attack would guarantee an American response that would be sure to destroy their lives, their government and the lives of millions of innocent Korean civilians.

However, this month I was made aware of another possible reason for the attention being paid to North Korea and its nuclear program. What if the escalating tensions over Korea are just a smokescreen intended to legitimize an American military buildup in the region aimed at intimidating China?

In 2011, former U.S. President Barack Obama announced a change in U.S. foreign policy that was termed a ‘Pivot to Asia.’ The official thinking was that as China and the emerging countries of South-East Asia gained in economic importance, it made sense to devote more military and diplomatic attention to the region while reducing the attention paid to Europe and the Middle East.

Of course, observers also saw the pivot as a response to the rising economic, political and military power of a resurgent China. Just as the U.S. sought to contain the Soviet Union during the Cold War with a string of encircling alliances and economic agreements, so America today seeks to keep China in check through military alliances with East Asian countries like Japan, South Korea and Taiwan and trade agreements such as the Trans-Pacific Partnership (TPP).

…click on the above link to read the rest of the article…

Pentagon Says Securing North Korean Nuclear Sites Would Require “Ground Invasion”

Pentagon Says Securing North Korean Nuclear Sites Would Require “Ground Invasion” 

With President Donald Trump arriving in Japan today to kick off a 10-day Asia tour, the Washington Post is reporting that the only way to locate and secure all of North Korea’s nuclear weapons sites “with complete certainty” would be a ground invasion, and in the event of conflict, Pyongyang could use biological and chemical weapons, the Pentagon told lawmakers in a newly released assessment of what war on the Korean Peninsula might look like.

The Pentagon, in a letter to lawmakers, said that a full discussion of U.S. capabilities to “counter North Korea’s ability to respond with a nuclear weapon and to eliminate North Korea’s nuclear weapons located in deeply buried, underground facilities” is best suited for a classified briefing.

The letter also said that Pentagon leaders “assess that North Korea may consider the use of biological weapons” and that the country “has a long-standing chemical weapons program with the capability to produce nerve, blister, blood and choking agents.”

The Pentagon repeated that a detailed discussion of how the United States would respond to the threat could not be discussed in public.

The letter noted that Seoul, the South Korean capital, is a densely populated area with 25 million residents.

The Pentagon’s candid assessment appears to validate claims made by former White House Chief Strategist Steve Bannon, who famously said in an interview with the American Prospect before he was forced out of his White House job that there are no “good” military options for toppling the Kim regime. A ground invasion, he said, would lead to millions of casualties in the South Korean capital of Seoul from conventional weapons fire.

…click on the above link to read the rest of the article…

The $200 Trillion Question

The $200 Trillion Question

Perhaps the most remarkable trend in global macroeconomics over the past two decades has been the stunning drop in the volatility of economic growth. In the United States, for example, quarterly output volatility has fallen by more than half since the mid-1980’s. Obviously, moderation in output movements did not occur everywhere simultaneously. Volatility in Asia began to fall only after the financial crisis of the late 1990’s. In Japan and Latin America, volatility dropped in a meaningful way only in the current decade. But by now, the decline has become nearly universal, with huge implications for global asset markets.

Investors, especially, need to recognize that even if broader positive trends in globalization and technological progress continue, a rise in macroeconomic volatility could still produce a massive fall in asset prices. Indeed, the massive equity and housing price increases of the past dozen or so years probably owe as much to greater macroeconomic stability as to any other factor. As output and consumption become more stable, investors do not demand as large a risk premium. The lower the price of risk, the higher the price of risky assets.

Consider this. If you agree with the many pundits who say stock prices have gone too high, and are much more likely to fall than to rise further, you may be right—but not if macroeconomic risk continues to drain from the system.

…click on the above link to read the rest of the article…

Is It War? The First 2 Of 12 F-35 Fighter Jets Have Arrived In Japan

Is It War? The First 2 Of 12 F-35 Fighter Jets Have Arrived In Japan

f35

The first two of 12 US Air Force F-35 Joint Strike Fighter jets arrived in Okinawa on Monday.  The aircraft will soon begin a six-month deployment in Japan as part of Pacific Command’s “theater security” program.

Is this a red flag for war with North Korea? Suspicions run high as tensions in the area continue to stiffen. The F-35 Joint Strike Fighter, the most expensive and one of the most controversial weapons systems in United States history, is dubbed “the cornerstone” of US defense in the Pacific. But what exactly are we “defending” against?

The Marines deployed their version of this fighter jet to a US base in Iwakuni, Japan in January.

According to CNN, approximately 300 airmen from Hill Air Force Base, Utah’s 34th Fighter Squadron will accompany the fifth-generation fighters to Kadena Air Base, Japan. The remaining 10 jets are expected to arrive in Okinawa this week, according to Air Force spokesperson Victoria Hight.

This deployment marks the first time that the Air Force’s version of the F-35 has been sent to the region and is meant “to demonstrate the continuing US commitment to stability and security,” according to the service. “The F-35A gives the joint warfighter unprecedented global precision attack capability against current and emerging threats while complementing our air superiority fleet,” said Gen. Terrence J. O’Shaughnessy, Pacific Air Forces commander, earlier this month. “The airframe is ideally suited to meet our command’s obligations, and we look forward to integrating it into our training and operations.”

While the Air Force said its F-35 deployment has been “long-planned,” their arrival comes as President Donald Trump prepares for his first official visit to Japan and amid simmering tensions with North Korea.  The coincidences are just a bit much to miss this time.

…click on the above link to read the rest of the article…

US May Strike North Korea in November

US May Strike North Korea in November

US May Strike North Korea in November

Former US President Jimmy Carter said he would be ready to travel to North Korea for peace talks, if the administration wanted him to go on a diplomatic mission. But President Trump does not appear to be chomping at the bit to grab the opportunity for launching a diplomatic initiative.

Recent North Korea’s intercontinental ballistic missile (ICBM) tests suggest that the country now has the capability to hit the continental US. The CIA has assessed that North Korea’s Hwasong-14, the intercontinental ballistic missile tested twice in July, has the capability to reach the US with a nuclear payload. According to the US Defense Intelligence Agency, North Korea may well have already developed a miniaturised nuclear warhead that could be delivered on an ICBM.

The defense chiefs of South Korea, the US and Japan met on October 23 at the 4th ASEAN Defense Ministers’ Meeting-Plus (ADMM-Plus) to emphasize the importance of strengthening their partnerships in maximizing pressure on North Korea.

The USS Ronald Reagan aircraft carrier strike group arrived in Busan, South Korea, on October 21 after participating in large-scale US-South Korean naval drills. Washington and Seoul started another military exercise on October 23. The annual Courageous Channel drills are to last five days. Pyongyang sees exercises as provocative actions, just like the strategic bombers’ flights. North Korean Foreign Minister Ri Yong Ho warned last month that his country reserves the right to shoot down US States strategic bombers even outside the national airspace.

US President Donald Trump said he is “totally prepared” to use military force against North Korea if necessary, in an interview with Fox News on October 22. Earlier this month, he dismissed the idea of dialogue as a “waste of time.”

…click on the above link to read the rest of the article…

Wave Of Eruptions Along Pacific ‘Ring Of Fire’ Leave 10,000s Displaced

Wave Of Eruptions Along Pacific ‘Ring Of Fire’ Leave 10,000s Displaced

The Pacific “Ring of Fire” is living up to its name.

The 450 or so volcanoes that make up the ring outline have been unusually active this year, sparking evacuations on the Indonesian island of Bali and on the tiny island nation of Vanuatu. Parts of southwestern Japan, meanwhile, have been shaken by a series of earthquakes, unsettling the local population, in an area where the massive Pacific Plate grinds against other plates that form the Earth’s crust, creating a 25,000-mile zone where earthquakes and volcanic eruptions are unusually common.

Three volcanos have either erupted, or are showing signs of an imminent eruption, across the region, according to a roundup published by the Associated Press.

Japan:

The Shinmoedake volcano in southwestern Japan started erupting Wednesday for the first time in about six years. An ash plume rose 1,700 meters (5,580 feet) from the crater Thursday and ash fell on cities and towns in Miyazaki prefecture. Japanese broadcaster TBS showed students wearing helmets and masks on their way to school at the foot of Shinmoedake. The Japan Meteorological Agency is warning that hot ash and gas clouds known as pyroclastic flows could reach 2 kilometers (1 mile) from the crater, and ash and volcanic rocks are a risk over a wider area depending on wind and elevation. It raised the volcanic alert level from 2 to 3 on a scale of 5. Level 3 warns people to not approach the volcano.

More than 140,000 people fled Mount Agung on the Indonesian resort island of Bali after its alert status was raised to the highest level on Sept. 22.

…click on the above link to read the rest of the article…

Just Because the Hedge Fund Wise Guys Have Forgotten

JUST BECAUSE THE HEDGE FUND WISE GUYS HAVE FORGOTTEN

Today’s post will be about Japanese yen vol, but I am sure to bore some readers with that topic, so I am starting with something a little more interesting. As many of you know, I am a little bit of a bitcoin skeptic. At the end of the day, I have trouble investing in the ledger in the sky.

Call me old-fashioned, call me a troglodyte, call me a bitter gold bug, call me whatever you want, I just can’t bring myself to get long bits in the cloud. And before you send me messages how I don’t understand it, don’t forget I was mining bitcoin before most of Wall Street had ever heard of it. So I am much more than just some trade-a-saurus that refuses to get with the times, I am the knob who passed on bitcoin at $5.

Yet I have the privilege of counting Tony Greer from TG Macro as one of my pals, and his enthusiasm about using crypto currencies for micro-payments has piqued my interest. From Tony’s great letter the other day:

For selfish reasons, this is the article that gets me most excited about bitcoin and the blockchain. The streamlining of media distribution is going to kick the door open for individuals to compete with publishing powerhouses and main stream periodicals.

Publishing content on Amazon, iTunes, even YouTube is extremely costly for the author/artist. Youtubers can’t earn money until they get 10,000 views. Apple and Amazon take between 30% and 75% for the right to their distribution networks. Since media consumption has gone digital, it’s been difficult to charge on a PER ARTICLE basis because of high transaction costs making it prohibitively expensive. All that’s about to change.

…click on the above link to read the rest of the article…

Stagnation Is Not Just the New Normal–It’s Official Policy

Stagnation Is Not Just the New Normal–It’s Official Policy

Japan is a global leader is how to gracefully manage stagnation.

Although our leadership is too polite to say it out loud, they’ve embraced stagnation as the new quasi-official policy. The reason is tragi-comically obvious: any real reform would threaten the income streams gushing into untouchably powerful self-serving elites and fiefdoms.

In our pay-to-play centralized form of governance, any reform that threatens the skims, privileges and perquisites of existing elites and fiefdoms is immediately squashed, co-opted or watered down.

So the power structure of the status quo has embraced stagnation as a comfortable (except to those on the margins) and controllable descent that avoids the unpleasantness and uncertainty of crisis. We all know that humans quickly habituate to gradual changes in circumstances, and that if the changes are gradual enough, we have difficulty even noticing the erosion.

So wages/salaries stagnate, inflation eats away at the purchasing power of our net income, junk fees, tolls and taxes notch higher by increments too modest to trigger protest, fundamental civil liberties are chipped away one small piece at a time, healthcare costs rise every year like clockwork, and the gap between the bottom 95% and the top 5% widens, as does the gap between the top .1% and the bottom 99.9%, productivity stagnates, the growth rate of new businesses stagnates, but it’s all so gradual that we no longer notice except to sigh in resignation.

Japan is a global leader is how to gracefully manage stagnation. Here’s how Japan is managing to maintain a comfortable secular stagnation:

Japan’s central bank creates a ton of new currency every year, which it uses to buy Japan’s government debt/bonds. This keeps interest rates near-zero, so the cost of government borrowing is kept minimal.

 

…click on the above link to read the rest of the article…

Japan’s “Deflationary Mindset” Grows As Household Cash Hordes Reach Record High

Japan’s “Deflationary Mindset” Grows As Household Cash Hordes Reach Record High

After being force-fed more stimulus than John Belushi, and endless rounds of buying any and every asset that dares to expose any cracks in the potemkin village of fiat folly, Japan remains stuck firmly in what Abe feared so many years ago – a “deflationary mindset.”

As Bloomberg reports, cash and deposits held by Japanese households rose for 42nd straight quarter at the end of June as the nation’s consumers continued to favor saving over spending.

The “deflationary mindset” that the Bank of Japan is battling to overcome was also evident in the money laying idle in corporate coffers, which stayed near an all-time high, according to quarterly flow of funds data released by the BOJ on Wednesday.

Still, as Bloomberg optimistically notes, with the economy expanding much faster than its potential growth rate, greater inflationary pressures could be on the way, which may prompt a shift in behavior by consumers and companies… or not!

Top Financial Expert Warns Stocks Need To Drop ‘Between 30 And 40 Percent’ As Bankruptcy Looms For Toys R Us

Top Financial Expert Warns Stocks Need To Drop ‘Between 30 And 40 Percent’ As Bankruptcy Looms For Toys R Us

Will there be a major stock market crash before the end of 2017?  To many of us, it seems like we have been waiting for this ridiculous stock market bubble to burst for a very long time.  The experts have been warning us over and over again that stocks cannot keep going up like this indefinitely, and yet this market has seemed absolutely determined to defy the laws of economics.  But most people don’t remember that we went through a similar thing before the financial crisis of 2008 as well.  I recently spoke to an investor that shorted the market three years ahead of that crash.  In the end his long-term analysis was right on the money, but his timing was just a bit off, and the same thing will be true with many of the experts this time around.

On Monday, I was quite stunned to learn what Brad McMillan had just said about the market.  He is considered to be one of the brightest minds in the financial world, and he told CNBC that stocks would need to fall “somewhere between 30 and 40 percent just to get to fair value”…

Brad McMillan — who counsels independent financial advisors representing $114 billion in assets under management — told CNBC on Monday that the stock market is way overvalued.

The market probably would have to drop somewhere between 30 and 40 percent to get to fair value, based on historical standards,” said McMillan, chief investment officer at Massachusetts-based Commonwealth Financial Network.

McMillan’s analysis is very similar to mine.  For a long time I have been warning that valuations would need to decline by at least 40 or 50 percent just to get back to the long-term averages.

…click on the above link to read the rest of the article…

North Korea Fires Ballistic Missile Which Passes Over Japan

North Korea Fires Ballistic Missile Which Passes Over Japan

Update 1:  According to Fox News, the U.S. has now confirmed the latest North Korean missile launch.

U.S. OFFICIAL CONFIRMS #NORTHKOREA FIRED BALLISTIC MISSILE: FOX NEWS

* * *

All the diplomatic posturing, the jawboning, the UN sanctions, and threats over the past three weeks has achieved absolutely nothing because as Yonhap and NHK report, North Korea has just launched an “unidentified” missile eastward from the capital Pyongyang.

A live feed from NHK in English is available after clicking on the image below:

Following the launch Japan has issued a missile alert to mobile phones and on national television, with the government advising people outside to take shelter immediately.

Worse, it appears that the missile has once again flown over Japan:

  • NORTH KOREA MISSILE PASSES OVER JAPAN, GOVT SAYS
  • N.KOREA MISSILE PASSES OVER JAPAN’S HOKKAIDO, GOVT SAYS

As NHK further adds, the missile which was launched at 6:57am local time, passed over Hokkaido at 7:06am local time, and came down in the Pacific Ocean, some 2,000 KM east of Japan’s Erimo Misaki.

The missile flew a total of 3,700 kilometers and reached an altitude of 770km, according to Yonhap.

Japan’s cabinet minister Suga said that the missile situation is similar to that on August 29, NHK adds, and that Japan will take appropriate response in contact with the US and South Korea.

NHK adds that Japan did not attempt to shoot down the missile though the South Korean military has confirmed it fired a test missile into the sea as part of training drill.

The South Korean presidential office has noted that the country’s national security council will meet at 8am local time.

Separately, according to South Korea military, North Korea fired unidentified missile in eastern direction. South Korea’s president Moon will chair a national security meeting shortly.

And now we await whether the US will finally escalate militarily or once again use even harsher, and more powerless, language.

North Korea Preparing For ICBM Launch: Japan Press

North Korea Preparing For ICBM Launch: Japan Press

Gold spiked and USDJPY tumbled as headlines from Japan’s Nikkei newspaper confirmed US military officials’ observations last night that North Korea is said to show signs of missile launch preparation.

As the Nikkei adds, citing an unidentified Japanese government official, the missile is being prepared for launch has engine for liquid fuel, suggesting missile is an ICBM. It adds that the missile is said to be fueled already, ready for launch. As Japan’s Asahi further notes, the North Korean missile prep may be for a Hwason 14 ICBM and adds that missile prep is said to have started on Wednesday.

The immediate reaction was a risk-off spike in the Yen and dollar.

This Nikkei report comes after North Korea’s threats overnight that it will “sink” Japan and reduce America to “ashes.”

North Korea Threatens To “Sink” Japan With Nuclear Weapons, “Reduce The US To Ashes”

North Korea Threatens To “Sink” Japan With Nuclear Weapons, “Reduce The US To Ashes”

Less than a day after US officials observed North Korea moving mobile missile launchers and engaging in preparations for what appears to be another missile test, a North Korean state committee has stepped up its belligerent rhetoric, threatening to use nuclear weapons to “sink” Japan and reduce the US to “ashes and darkness” after the UN Security Council passed new sanctions against the isolated country earlier this week, Reuters reported. The North also accused the US of “cooking up” the latest restrictive measures against it and demanded that the US be beaten “to death as a stick is fit for a rabid dog.

These latest threats follow reports from last night that US satellites had spotted the North’s military moving mobile missile launchers and preparing hard sites for what’s expected to be the country’s fourteenth missile test of 2017. The revelations followed reports of new commercial satellite imagery confirming an earlier analysis identifying numerous landslides throughout the Punggye-ri Nuclear Test Site on the slopes of Mt. Mantap (and beyond) resulting from North Korea’s sixth nuclear test. The data suggest that the hydrogen bomb test was up to three times more powerful than previously believed.

According to Reuters, North Korea’s Asia-Pacific Peace Committee, which handles the North’s external ties and propaganda, called for the breakup of the security council, which it accused of being “a tool of evil” made up of “money-bribed” countries that move at the order of the US. Then it turned its attention to Japan…

“The four islands of the archipelago should be sunken into the sea by the nuclear bomb of Juche. Japan is no longer needed to exist near us,” the committee said in a statement carried by the North’s official KCNA news agency.”

…click on the above link to read the rest of the article…

Olduvai II: Exodus
Click on image to purchase

Olduvai
Click on image to purchase

Olduvai II: Exodus
Click on image to purchase

Olduvai III: Cataclysm
Click on image to purchase