Category Archives: Japan

Martin Wolf: Rethinking the Lessons of Japan’s Debt Unwind

Ah, today the Financial Times reminds me of the way it was back in early 2007, when it was clearly heads and shoulders above any US paper. Wonder why I have fewer days like that, It isn’t improved reporting by the US media (although they are further down the curve). I suspect that the FT […]

Japanese Economy Shrinks at Nearly 13% Annual Rate in Q4: No Relief in Sight

Japan has long had a two-tier economy: a robust export sector and a comatose domestic economy. With the yen at a high level and trade volumes generally falling, the export sector has gone spectacularly into reverse gear, taking overall growth with it. From Bloomberg: Japan’s economy shrank at an annual 12.7 percent pace last quarter, […]

"We Are Threatened by a Veritable Disaster"

I must confess to having read only a bit of economist Axel Leijonhufvud’s writings, but what I have seen, I have liked very much. Leijonhufvud’s current post at VoxEU does a very good job of looking at the economic mess the US is in and assesses policy options. It is a remarkably straightforward piece. Most […]

New York Times: US Going Down the Japan Path By Not Taking Out Dud Banks

Your humble blogger has said that rationalizing and recapitalizing the banking system is essential for recovery. Economists like Ben Bernanke attribute Japan’s failure to dig itself out of its hole to not being aggressive enough in terms of fiscal and monetary stimulus,. Yet Japan did a great deal on both fronts. The biggest difference between […]

Veneroso: Japan on the Edge of the Abyss

A reader chided me for not making note of the truly dreadful factory output figures released last Thursday, which showed a fall of 9.6%. I have to confess that I have fallen into “Japan bad news” syndrome, in that I expect bad news out of Japan and therefore did not focus enough on the details. […]

Bank of England to Start Quantitative Easing

When the Federal Reserve went “all in” as wags liked to put it on December 17, with its declaration that it would use “all available tools” to fight looming deflation. The bond and currency markets both took note, with the dollar falling sharply before rebounding and mortgage interest rates falling (nicely done, to get much […]

Japanese Rating Agency Chief Recommends Marshall Plan for US

In part because the Japanese corporate bond market is no where near as deep and large as its US counterpart, Japanese rating agencies hold far less sway than Moody’s and Standard & Poor’s. Nevertheless, the idea that Japan should write down its vast holdings of Treasuries and support US infrastructure spending (albeit with a few […]

Has Beggar Thy Neighbor Started?

One of the ugly features of the Great Depression that in many (but not all) cases worsened the severity of the contraction was that countries adopted “me first” policies with little regard to their broader ramifications. The poster child of this pattern is Smoot Hawley. Although there is some dispute among economists as to whether […]

So Now We Are Trying to Emulate Japan’s Lost Decade?

US economists have relentlessly harangued the Japanese for their supposed mismanagement of their post bubble era, which has lead to nearly 20 years of low growth, borderline deflation, with a not-much-discussed, robust export sector. Along with others, we complained in the early days of the Fed/Treasury emergency response that they were taking one of the […]

Tobin’s Q Ratio Says Equity Bottom Much, Much Lower

A story on Bloomberg, “Q Ratio Signals ‘Horrific’ Market Bottom, CLSA Says,” argues that the global equity market bottom will be well below the recent lows, but also thinks we may not see it until 2014 as the current pump priming measures hold off deflationary pressures for a while. Note that Gary Shilling, who was […]

Japan Slowdown Exceeds Expectations

The Nikkei and Topix are marginally in positive territory as of this writing (the Nikkei up a bare five points) retracing earlier gains. The proximate cause appears to be a downbeat revised GDP report. Stocks initially appeared to shrug off the bad news, taking momentum from the Euro/US rally, but upon reflection, have (for the […]

Japanese Float Idea of the Treasury Selling Yen-Denominated Debt

We have been mystified at the utter silence on behalf of our friendly foreign funding sources at their willingness to be patsies to continue buying Treasuries when the outlook for the dollar is far from rosy. The US’s funding needs are going to escalate sharply due to the need to pay for rescue programs. And […]