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Guest Post: Thoughts On Japan

Tyler Durden's picture


Submitted by Charles Hugh Smith from Of Two Minds

Thoughts on Japan

I suspect the consequences of Japan's massive earthquake will be much more transformational than most now imagine.

Long-time readers know that I studied Japanese language, culture, literature and geography in college, and that we have many friends there.

Thus it is not just an academic exercise for me to ponder the longer term consequences for Japan and
the world as the full extent of the damage is toted up. Emails are trickling in from our friends in Japan, and so far everyone is OK. (Here's a photo of me and one of our Japanese friends during a camping trip to Big Sur.)

Photos of Japan always spark memories of our extensive travels there. As those of you who have visited Japan know, it is incredibly rich in scenery, and though it may appear small on a world map it is quite "large" visually.

I have also studied Korea and China for decades, both formally in university and informally, and we have traveled extensively in both China and Korea and have many friends in each country. So it is with some "on the ground" knowledge, personal friendships and formal study that I say that though all East Asian societies share characteristics drawn from China's ancient culture, each is unique in many ways.

From the Western perspective, Asian cultures offer up numerous paradoxes (or apparent paradoxes). For example, in extremely polite Japan you might yourself rudely crammed into a train. The refinement of the Japanese aesthetic visible in everything from architecture to furniture to gift-wrapping vanishes in the visually manic page layouts of magazines and adverts. A stable, basically conservative society is also the breeding ground for the most absurd and extreme fads in clothing, gadgets, etc.

A relentlessly high-tech economy remains firmly rooted in agricultural and food-related traditions. Here is a photo of

drying persimmons (kaki) I took in our friends' home in Nagano.

A key feature of Asian culture is the distinction between public "face" and private lives. Thus the Japanese appear stoic in public, as one's private emotions are reserved for life beyond the public eye (unless one gets drunk, of course, and behavior while drunk is set aside in a special category. I have seen drunks shouting and pushing police in Japan--behavior that would get them tasered or shot in the U.S. The cops just calm the guy down; after all, he's just drunk.)

But this stoicism also reflects the deep reserves of resilience built into Japanese culture. People endure: shoganai, it can't be helped.

Japan is a wealthy nation, with deep reserves of finance, talent and determination. It is impossible to say who works harder and longer, the Chinese, Japanese or Koreans: all three societies demand workloads that would crush most Americans and other Westerners. Much of the "economic miracles" wrought by each of these countries results from this tremendous work ethic.

If you watch many films from China and Japan, you will note that sacrifice is often a theme: individuals sacrificing for the family (children or parents) or for the nation.

Here is a photo of our friend's delightful nieces, before they blossomed into young teens.

Despite the many strengths of Japanese society and culture, and the tremendous reserves of talent, dedication and self-sacrifice of its people, my gut feeling is that this series of devastating earthquakes will have more enduring consequences on the world economy than most observers seem to expect.

Japan has managed to sustain a 20-year Keynesian experiment in central government borrowing and spending "stimulus" rather than force the insolvency of its vast banking and insurance sectors. What allowed this endless piling up of debt is the people's willingness (channeled by regulations and limitations on other investments, of course) to buy low-yield Japanese bonds.

But Japan's demographics are changing. The Baby Boom generation which sunk their prodigious savings into bonds is retiring, and instead of buying more bonds they are selling assets to fund their retirements and healthcare.

On the surface--in public--Japan appears to be entirely stable financially. It's as if the national debt, currently about 200% of GDP, could rise to 300% or 400% or 1,000% without any consequence or breakdown. But demographics changes all sorts of things, and the added financial burdens of funding trillions of yen in rebuilding costs could push Japan's public finances over some unseen edge.

Should Japan be unable to self-fund its ever-rising debt, then it would have to compete globally for bond buyers. Interest rates would have to rise, and that would eventually trigger a collapse in public finances, as the costs of servicing that rising debt exceeds the government's ability to borrow money.

Japan's Status Quo--its "Establishment"--has clung on to various structural imbalances for the past two decades, refusing to threaten powerful financial and political fiefdoms with fundamental reforms. The Status Quo has played "extend and pretend" on a vast scale for an entire generation, and this has pushed Japan to a financial precipice.

All this makes me wonder if the initial "let's work together, it can't be helped" stoicism and self-sacrifice will erode at some point and trigger a social earthquake: a sudden demand for real reforms rather than more facsimiles of reform that change nothing in the power structures of the economy and government.

Some analysts have reckoned that Japan will consume less oil and resources in the wake of the quake, but if we look out a bit further, we see that rebuilding will require monumental amounts of energy and materials. Japan's consumption of commodities will rise, not fall.

Though China gets all the media attention, Japan is still a critical supplier of numerous high-tech parts in the global supply chain. The Japanese global corporations have learned from experience that anything they make in China will soon be pirated, so they have withdrawn all the really high-tech manufacturing to the home islands.

I suspect most analysts are complacent about the possible global ripple effects of these quakes, simply because Kansai and Tokyo were largely spared.

Given its great stability and wealth, Japan seems an unlikely candidate for social or financial changes triggered by a natural disaster. I am not so sure it is immune to these forces, given the fragility of its central State and local government finances and its sclerotic Power Elites and political machinery.

The quiet stoicism of the next few months may give way to more systemic and possibly transformational forces than most observers believe possible.


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Sat, 03/12/2011 - 16:36 | 1044952 Armchair Bear
Armchair Bear's picture

sorry but persimmons are yucky!!

My prayers go out to the people of Japan.  Let's all hope they will be recovering quickly from this.  The web bot reports indicate that Japan will be switching their productive capacity to preparing for the upcoming 2012 earth changes.  This seems a likely catalyst.

Sat, 03/12/2011 - 19:15 | 1045150 Michael
Michael's picture

Am I bad to feel it would have been better if it happened to New York City or San Francisco, for those cities I wouldn't have felt so bad?

Read the words interlaced in this video, too funny.

Talking Heads - (Nothing But) Flowers

Sat, 03/12/2011 - 20:20 | 1045270 snowball777
snowball777's picture

No, just incredibly fucking stupid. As always.

Sat, 03/12/2011 - 22:42 | 1045469 Mark McGoldrick
Mark McGoldrick's picture

So you wish the earthquake/tradegy occurred in NY or San Franscisco instead?

Let me guess....  you're a doomer, whacked-out libertarian?

You remind me of another sick libertarian who prayed for a repeat 9/11 style terrorist attack to occur on the 9/11 anniversary last September, or the obnoxiously huge number of libertarians who took so much amusement and satisfaction in the Tucson tragedy.    

You guys are sick to the fucking core. Seriously.


Sun, 03/13/2011 - 01:24 | 1045970 Michael
Michael's picture

When you've been repeatedly raped for 50 years by those guys, you get a bit numb to touchy feely thought when it comes them.

Sat, 03/12/2011 - 16:40 | 1044960 Scottj88
Scottj88's picture

Very well written...

Thank you for your comments.

A small recap + other things going on in the world...

Sat, 03/12/2011 - 20:37 | 1045205 Michael
Michael's picture

I was reading the Charles Hugh Smith blog since the early days of the housing bubble.

Run Ron Paul!

Video: Rand Paul EPIC rant at Energy Committee Hearing: "You restrict my choices!"

Sat, 03/12/2011 - 16:43 | 1044967 ZeroPower
ZeroPower's picture

Some analysts have reckoned that Japan will consume less oil and resources in the wake of the quake, but if we look out a bit further, we see that rebuilding will require monumental amounts of energy and materials. Japan's consumption of commodities will rise, not fall.


Agreed. And whowever thinks the initial reaction of a higher JPY after the news hit friday was the right reaction, well, lets be forward looking for a week, a month, even a year. No way it stays at these high levels.

Sat, 03/12/2011 - 17:31 | 1045032 JNM
JNM's picture

I concur.

Ok, next few DAYS, they will consume less, but the insurance checks are going to be a stimulus.  Then, after the insurance money enters the system, Japan will come out more competitive within a year or two.

The $81B trade surplus, on $820B in exports, is likely to take a major hit for the next 6 to 12 months, but that means other economies will pick up the slack.  The other countries will obviously, be less effecient than Japan.  Which means more inputs will be consumed in production.

What I'm saying is, Japan might not directly consume commodities, but other countries will in their place as they move to compensate for Japan's (likely to decline) trade surplus.

...I think! All of the above, is just my $0.02, there are a ton of variables to consider, IMHO.

Sat, 03/12/2011 - 18:14 | 1045090 KickIce
KickIce's picture

Financial aid typically disappears due to corrupt politicians.

The insurance companies have pay limits.

$0.02, sounds like this will be the insurance companies per person liability.

Of course our broke asses will be over there as our leaders continue to push the Cloward/Pivens agenda.  (Just to clarify, I have no problem with the charity and my heart goes out to the Jaanese - but we are broke)

Sun, 03/13/2011 - 01:30 | 1045982 rocker
rocker's picture

No Worry. The Bernanke Will print for this too !!!

Sat, 03/12/2011 - 17:11 | 1045003 Guy Fawkes Mulder
Guy Fawkes Mulder's picture (90k missing 24 hrs ago, unconfirmed)

I wonder just what the death toll will be, when all is said and done.

Sat, 03/12/2011 - 19:24 | 1045197 Arch Duke Ferdinand
Arch Duke Ferdinand's picture

""I wonder just what the death toll will be, when all is said and done.""

...But Mt Fuji needs to blow it's top first...

Sat, 03/12/2011 - 17:14 | 1045007 Id fight Gandhi
Id fight Gandhi's picture

I just shake my head to hear the mindless euphoric talking heads say that the global economy and stock markets can handle the Japanese quake on top of all other distresses. BTFD right? Second, third largest economy in the world comes to a halt and it's just business as usual.

The insanity just never ends.

Sat, 03/12/2011 - 17:35 | 1045035 Atomizer
Atomizer's picture

The insanity just never ends.


Don't let the tinfoil MSM TV get you down. This insanity is coming to an end. Mark my words.

Sat, 03/12/2011 - 20:28 | 1045279 Troll Magnet
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too bad these financial terrorists can't naked short mother nature.

Sat, 03/12/2011 - 21:17 | 1045338 Id fight Gandhi
Id fight Gandhi's picture

US markets still flee to the "safety" of momo stocks. Whole world is falling apart and fed printed money is getting stuffed into Netflix, chipole etc.

Oh and the news out of mena is at a trickle, but Yemen, Libya are heating up big time.

Sat, 03/12/2011 - 18:58 | 1045151 reader2010
reader2010's picture

They will have the need for the new world currency that's designed by the Party Six. Watch out because this tragic event is just the start.

Sat, 03/12/2011 - 19:31 | 1045203 Atomizer
Atomizer's picture

new world currency that's designed by the Party Six


IMHO, it won't happen. Have you and others noticed how they have ratcheted up crisis media news? Complete sign of desperation in their attempt to control. Everything ends once the WH is disinfected by means of unconstitutional laws. The more they create a crisis mode (kill/loot), the easier to remove them under US Patriot Act laws. In the near future, you will witness an entire new game of blaming others. The snake eating its tails will have second rounds at the buffet. Just watch :)

Sat, 03/12/2011 - 21:19 | 1045341 duo
duo's picture

Do you think the Bernank, Geithner, et al would trade 100,000 lives for $20 cheaper oil?  You bet.  When you have the deflation, you can have more QE.

Sat, 03/12/2011 - 17:20 | 1045012 lolmao500
lolmao500's picture

Well if the coming change in status quo can stop the censoring of their porn, I'm all for it.  :)

Sat, 03/12/2011 - 17:40 | 1045043 I am more equal...
I am more equal than others's picture

Though China gets all the media attention, Japan is still a critical supplier of numerous high-tech parts in the global supply chain. The Japanese global corporations have learned from experience that anything they make in China will soon be pirated, so they have withdrawn all the really high-tech manufacturing to the home islands.

Japan did the same thing to the US - now history is repeating itself.  That's funny. I wonder what would have happened if the US took the same precautions post WWII as Japan is now doing with China. 

Sat, 03/12/2011 - 17:43 | 1045047 velobabe
velobabe's picture

mr smith, so enjoyed reading your little story about your life and all things japanese and asian. my first bicycle was a Shogan, made in japan. it took me to my next life. i had always hoped on having enough resources to visit japan one day. i hope i can still obtain this dream. i think a lot more americans have japanese DNA in them. i think the founders, who built this great island, knew they were venerable. the temples, japanese archways to shinto shrines, and paper walls. glad to hear your friends are ok. i hope everybody else is, as well.

Sat, 03/12/2011 - 19:21 | 1045188 reader2010
reader2010's picture

NHK has a series on the Meiji Restoration of 1860s, and it talked about how they successfully learned (stole) technologies from England.

Sat, 03/12/2011 - 18:10 | 1045085 billwilson
billwilson's picture

Enjoyable read and informative.


Looks like time for some yen printing. It will keep rates down and the yen low, while helping maintain a trade surplus. Definitely tough times ahead.

Sat, 03/12/2011 - 18:28 | 1045116 Seasmoke
Seasmoke's picture

China, Japan, Hong Kong , Taiwan......what the difference

Sat, 03/12/2011 - 19:15 | 1045182 reader2010
reader2010's picture

A major difference is that the Chinese hate/distrust each other while worship the westerners. The Japanese respect/trust each other but distrust westerners. The Koreans are somewhere in between the Chinese and the Japanese. 

Sat, 03/12/2011 - 18:29 | 1045117 Mr. Denny Kneel
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Nice work. Agreed on most points. I think many will be surprised by the kindness and unity that the Japanese culture will display in the coming weeks and months.

Depending on where recovery monies originate, this could be stimulative to the stagnating economy there. But definitely depends on where monies come from.

Do you have any info on the impacts on high tech. manufacturing from a destabilsed electric grid?

Sat, 03/12/2011 - 19:16 | 1045179 rolypolyfishhead
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An informative read, and a perspective I haven't seen anywhere else.


Thank you

Sat, 03/12/2011 - 19:16 | 1045184 Muir
Muir's picture

"Should Japan be unable to self-fund its ever-rising debt, then it would have to compete globally for bond buyers. Interest rates would have to rise, and that would eventually trigger a collapse in public finances, as the costs of servicing that rising debt exceeds the government's ability to borrow money."


No QE1 for the yen?



Sat, 03/12/2011 - 19:18 | 1045186 RockyRacoon
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There are lessons to be learned from this catastrophe.   California and/or the New Madrid fault are ripe for harvest.

Sat, 03/12/2011 - 19:24 | 1045195 chindit13
chindit13's picture

In the ten years I lived in Japan I often used to fly around up north near yesterday's epicenter, landing at the various small to medium sized airports to refuel or get the thousand yen bowl of ramen. It was an odd and eerie sight to watch Sendai Airport now under water. I remember having to leave my shoes at the outside door, don a pair of way too small slippers, and make my way upstairs to the flight control center and weather office for permits and condition reports.

The cities and towns up there are admittedly mostly forgettable, one almost indistinguishable from the other, at least in terms of the homes and structures. Very narrow roads often have telephone poles intruding on to the pavement so much that two-way passage of vehicles becomes difficult. Lots of gray buildings, sprinkled with the occasional Denny's or Yoshinoya or Lawsons, weakly define each town. Despite the clutter, the streets are almost universally spotless, everybody sweeping the area in front of his own home or business daily.

Where Japan's simple beauty evidences itself is in the incredible order and uniformity of the agricultural fields, as if they were aligned by laser and etched with machine tool precision on to the earth. They're mostly rice, but there's also various fruits and vegetables, only the most perfect of which make their way to a store shelf. No grain of sand is out of place, as if each one was placed in a specific position only after considerable thought.

The debris-filled muddly waters from the tsunami are the absolute antithesis of everything the fields were lovingly and painstakingly groomed to be. As the waves moved across the land yesterday it was a visual yin and yang on a grand and horrific scale.

Japanese being Japanese, however, a year from now the people will have taken back their land completely, without complaint, but with memories of the human and monetary losses hidden behind their typical stoic mien.

Sun, 03/13/2011 - 00:25 | 1045846 Mark McGoldrick
Mark McGoldrick's picture

Nice post.

In Japan, one finds so much beauty and thoughtfulness in the most unexpected places; they take such pride and care in the smallest things, almost to the point of obsession.  

Sun, 03/13/2011 - 08:20 | 1046264 h3m1ngw4y
h3m1ngw4y's picture

nice, thank you

Sat, 03/12/2011 - 19:56 | 1045243 dwdollar
dwdollar's picture

I wonder if this event will demonstrate to the Japanese people the need for a true military force.

The rise of Japanese nationalism?

Sun, 03/13/2011 - 02:18 | 1046036 BlakeFelix
BlakeFelix's picture

An anti-earthquake military force?  In case the reactor melts down and awakens Godzilla?  They are better off with the money I think...

Sat, 03/12/2011 - 20:28 | 1045278 Hammurabi
Hammurabi's picture

thank you TD for the beautiful article,

Sat, 03/12/2011 - 20:38 | 1045289 dearth vader
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Interesting piece, CHS, thank you.

As to the images, I was most fascinated watching those neat fields which 'chindit13' so aptly descibes, gobbled up, metre by metre, by the rolling slush. Fascinated, and sorrowful.

Sat, 03/12/2011 - 20:43 | 1045294 JackES
JackES's picture

I don't care at all.

US equity market is going higher.

Sat, 03/12/2011 - 21:03 | 1045325 TriggerFinger
TriggerFinger's picture

tongue in cheek?  or ethnocentric buffoon?  either way, revel in your ignorance   

Sat, 03/12/2011 - 20:53 | 1045309 Atomizer
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The more you dig into this manufactured crisis, you will begin to understand slated plans.

February 2011 -- Vienna

Sat, 03/12/2011 - 20:59 | 1045322 Rusty Shorts
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"IWAKI, Japan – Cooling systems failed at another nuclear reactor on Japan's devastated coast Sunday, hours after an explosion at a nearby unit made leaking radiation, or even outright meltdown, the central threat to the country following a catastrophic earthquake and tsunami."

Sat, 03/12/2011 - 21:15 | 1045334 Vlad Tepid
Vlad Tepid's picture

TD, this was a reallygreat article that put a lot of things in perspective for people (except Michael. He's beyond help.)  I'd like to see more analysis about Japan from this author going forward into the recovery months ahead.  

Sat, 03/12/2011 - 21:36 | 1045368 Hannibal
Hannibal's picture


Sat, 03/12/2011 - 21:56 | 1045370 chindit13
chindit13's picture

My earlier post notwithstanding, there is an aspect of the Japanese character that is evidencing itself with regards to the nuclear reactor event, which is that people will do or say---or avoid doing---almost anything to save face.  In addition, the Confucian ethic often prevents knowledgeable, albeit less senior people from voicing concerns or offering advice to a senior, especially if that senior is acting as if he is on top of things.  Respect for authority and all that.

Obviously much of the scattered and conflicting information is due to the disaster itself and the difficulty of moving about and communicating, but much might also stem from what outsiders might call the peculiarities and idiosyncracies of the people.  There is a tendency to do what has always been done rather than adjust to changing or new circumstances, and a tendency to avoid "unpleasantness", which often means hiding from reality.  Ten people might be absolutely certain of the answer, but if the boss has his own answer, that will be what is followed, even if everyone else knows it to be wrong.

Japan had a nuclear accident several years ago, the details of which I cannot recall, except for that authorities refrained for hours from sharing information they knew to be critical, either out of shame or in order to spare "unpleasantness".  At least one plant worker, who had been carrying radioaactive liquids in a plastic bucket, died.

In another matter, related to Mad Cow disease, Japan used to peridocially test animals coming to processing plants for evidence of the disease if animals showed evidence of ill health.  After the autopsies, almost all of which were negative, the test facilities followed procedure and sold the carcass to a feed processing plant.  On one occasion several animals tested positive for Mad Cow, yet the normal procedure was followed and the diseased carcasses were still sold to a feed processing plant.  The Mad Cow prions ended up in the feed that was eaten by cows all across Japan, which is one of the prime means of transmission.  This is different from incompetence;  this is the result for the penchant for, or obsession with following procedure above all else.  These traits or characteristics certainly have advantages and for the most part have served the people and the country well, but there are times when they become a burden or an obstacle.

Sun, 03/13/2011 - 09:32 | 1046330 dearth vader
dearth vader's picture

Hi chindit13

"There is a tendency to do what has always been done rather than adjust to changing or new circumstances, and a tendency to avoid "unpleasantness", which often means hiding from reality."

Well put, but is this typical for the Japanese? It's exactly this same attitude which Kunstler, in his latest post, throws in the face of the American people and politicos for dreaming the American Dream with their eyes wide open, in disregard of the new reality.

Sat, 03/12/2011 - 22:34 | 1045444 YHC-FTSE
YHC-FTSE's picture

Beautifully written, but I am not sure I share your fears. Even disregarding the cultural paradoxes, human beings have a natural tendency to band closer together for cooperation during times of turmoil. I realize American culture regards itself as the vanguard of the individual, but imo, only the paranoid, selfish, and psychologically damaged forget what we are first and foremost: Social animals. The manic empty pursuit of hedonism dressed up as individuality is, imo, sub-human behaviour and most often expressed in criminals. I would suggest you take a good hard look at your society first, before projecting the worst aspects of it to others. 

Sat, 03/12/2011 - 22:35 | 1045471 locinvestor
locinvestor's picture

I lived in central Japan between '91 and '02. I was lucky enough to extensively travel from Tokyo down to Kyushu (the southernmost island). I've also been to all of the affected areas that are in the news.

In some ways, Japan is similiar to the States. One example: the slowness of the "good old boy" network (keiretsu in Japanese). Will this meltdown affect the global markets? I'm not sure.

However, this means that the propagnada battle between environmentalists and nuclear power firms is on again. We'll see lots of screaming head "debates" on the news channels that won't accomplish anything.

Will this affect stocks? To a certain extent, yes. As for other things (bonds, commodities and more), it's too early to see.



Sun, 03/13/2011 - 00:06 | 1045807 icm63
icm63's picture

The forecast cycle for N225 is down. And that was before the earth quake


Sun, 03/13/2011 - 00:14 | 1045824 ebworthen
ebworthen's picture


What about Japan and China (and Korea)?

Long time combatants - what are their relations now?  How would they side with the West?

I see conflict building in the Pacific - with China asserting themselves as a naval power.



Sun, 03/13/2011 - 01:43 | 1045993 baldski
baldski's picture

Great piece on Japan. As a person who has multiple visits and business dealings in Japan for 40 years, your observations on their culture is spot on.

Sun, 03/13/2011 - 06:02 | 1046173 ivars
ivars's picture

DPJ, LDP to discuss tax hike to secure funds for quake relief

Sun, 03/13/2011 - 07:59 | 1046241 Escapeclaws
Escapeclaws's picture

CHS, I'm always a big fan of yours. The delightful picture of your friends nieces reminded me of the following rendition of "The Steppes of Central Asia" by a beautiful Japanese pianist. It conveys the inner peace that the Japonese people have such a need for during this crisis:

Sun, 03/13/2011 - 08:22 | 1046266 Roger Knights
Roger Knights's picture

In 1995 Peter Hadfield's book, "Sixty Seconds that Will Change the World" examined the economic effect of a hypothetical huge earthquake that devastated Tokyo. I.e., one much worse than the current one. But his analysis may still have insights about this one. Here's a synopsis of the book, from Amazon, where cheap used paperback copies are available:

"In the 1990s Tokyo will start to experience earthquakes culminating in a catastrophe on the scale of the 1923 tremor that killed 140,000 people. This time however the effects of such an earthquake in Tokyo will be world-wide. The collapse of Japan's industrial production will lead to a major world recession together with a dramatic fall in currency values and world GNPs. Peter Hadfield, a Tokyo-based journalist and former geologist, has talked in detail to Japan's leading geologists, engineers and economists. He predicts what will happen during and after the earthquake, and at its effect on the world economy. He also looks at the psychology that leads millions of Japanese to ignore the danger signals - even now, a vast new city is being constructed in Tokyo Bay - and at the corruption that spurs such developments on."

Here's the link:

Sun, 03/13/2011 - 09:12 | 1046309 jkruffin
jkruffin's picture

World Markets, and even the ponzi U.S. market included, will be crashing hard this week. Guaranteed! POMO is not going to save the slide this time. Japan news is huge and will tear down this ponzi scheme being run by Bernancompoop.

Sun, 03/13/2011 - 09:25 | 1046322 ivars
ivars's picture

Stocks went higher late Friday, amazing! They will for sure come crushing down on Monday. Good I have shorted them on Friday. The scale of even just industrial damage due to supply chain disruptions, factory damages and planned 3 hour power outages. Japanese industries will be closed for a week or more as there is 70% chance of Magnitude 7 aftershock next week: A number of Japanese companies including NEC Corp. and Suzuki Motor Corp. joined others Sunday in announcing a temporary suspension of their domestic plants following Friday's massive earthquake in northeastern and eastern Japan, company officials said. While some of their plants were hit by the quake and quake-triggered tsunami, many factories will be unable to operate due to a lack of parts and the need for inspection. A scheduled power outage could also halt operations at some plants, possibly affecting output of various products. Among automakers, Hino Motors Ltd., Mitsubishi Motors Corp., Fuji Heavy Industries Ltd. and Isuzu Motors Ltd. have decided to temporarily suspend their domestic plants, officials of the companies said. The automakers will suspend production from Monday, along with other automakers including Toyota Motor Corp. and Honda Motor Co., which have also decided to close their plants Monday due to difficulties in procuring parts. Among major automakers, Mazda Motor Corp., based in Hiroshima Prefecture in western Japan, is the only automaker which plans to continue full-fledged operations at its plants. Suzuki Motor will stop operations at all six domestic plants, while Fuji Heavy will suspend operations of five plants. Isuzu will halt operations at two plants. Hino, the Toyota group's truck and bus unit, will suspend output Monday at all three plants in Tokyo and Gunma prefectures, company officials said. Mitsubishi Motors said it will suspend production at all three plants which make finished cars on Monday and Tuesday because it is unable to fully assess the situation faced by its five or six parts manufacturers in the quake-hit Tohoku region. Nissan Motor Co., Daihatsu Motor Co., Mitsubishi Fuso Truck and Bus Corp. and UD Trucks Corp. also decided earlier to suspend production at their plants on Monday. Among electronics companies, NEC has decided to suspend operations at three plants including one in quake-hit Iwate Prefecture. Hitachi Ltd., which has main production bases in Ibaraki Prefecture, is expected to see difficulties in operating many of its plants in the prefecture also hit hard by the quake. Mitsubishi Electric Corp. will suspend operations to inspect its factory Monday in Iwaki, Fukushima Prefecture, while Toshiba Corp. will halt its semiconductor plant in Iwate Prefecture. Panasonic Corp. and its group companies have also decided to stop operations at four plants. Nippon Steel Corp. has already suspended operations at its flooded plant in Iwate, with a company official saying, ''There are no prospects of restoring facilities.'' Sumitomo Metal Industries Ltd. is likely to see difficulties in operating its steel plant in Ibaraki normally after it was damaged by a fire. Kirin Brewery Co. has also stopped production at its factory in Ibaraki as the company found its three beer storage tanks tilted. Also on Sunday, the government urged large companies to limit electricity use amid fears of possible supply disruptions in the aftermath of the devastating earthquake, which has crippled nuclear power plants in northeastern Japan. Yoshikatsu Nakayama, parliamentary secretary of the Ministry of Economy, Trade and Industry, asked in a meeting with officials of the Japan Business Federation that companies save use of air conditioners, lighting and hot-water supply for business purposes and neon lighting at night. Nakayama also asked that manufacturers consider shifting production to areas outside the quake-hit Tohoku and Kanto regions and won cooperation from Japan's most influential business lobby, known as Nippon Keidanren. Yoshio Nakamura, director general of Nippon Keidanren, said, ''We would like to convey the request to member companies and those concerned,'' adding, ''We'd like the government to make all-out efforts now to help people who are affected by the disaster.'' Nakayama also sought businesses' acceptance of a possible scheduled power suspension, before Tokyo Electric Power Co. decided to go ahead with the measure as a substantial power shortage is likely from Monday. Meanwhile, the Small and Medium Enterprise Agency said it will implement a special loan security program for small and medium-sized firms which have received certificates of misfortune issued by local governments.

Mon, 03/14/2011 - 02:02 | 1049226 RockyRacoon
RockyRacoon's picture

Wow, you should write for  You're good.

Sun, 03/13/2011 - 09:41 | 1046341 99er
99er's picture

Nikkei Futures

Weekly chart with a Wolfe Wave target of 8350.

Sun, 03/13/2011 - 11:00 | 1046422 sbenard
sbenard's picture

Here's what I'm asking myself following this disaster. We all know that triggers often come as black swan events that were unanticipated.

What will be the impact on global bond markets as Japan's government, already swimming up the the eyeballs in debt, accelerates its debt issuance to rebuild following this disaster? John Mauldin famously said that from an economic standpoint, the depth of Japan's debt makes Japan "a bug looking for a windshield". Could this be that windshield?

I would be eager to see what other people think about this.

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