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Japan Sliding Into Dodecatuple Dip Recession
A long time ago in a galaxy far, far away, fundamentals used to matter. In this place tonight's news that Japan is slipping back into its +/-20th sequential recession would have resulted in a plunge in the Nikkei, and a lot of overtime work for the Japanese plunge protection team, which unlike its US equivalent, does not hide in the shadows, and is well-known to intervene when equities plummet. Earlier, Japan announced that not only did its jobless rate increase more than the expected 5%, hitting 5.1%, once again openly starting on its one way trek to the record 5.6% achieved at the trough of the crisis, but deflation also picked up, hitting -1.5% in April (and where prices did not fall, they were supported by government subsidies), and completing the trifecta was that household spending came in at -0.7%, after estimates called for a 2.5% increase after the 4.4% prior reading. Instead, in our current galaxy, the Nikkei was up 1.5% because China said that it would not sell its European bonds, an act which would have brought the euro to parity and slashed the value of China's trillions in foreign reserves by about 10% overnight (also, the fact that a dollar-strapped BOJ demanded $200 million in FX swaps from the Fed was certainly also not lost on the market). Gee, it is truly shocking they did not confirm they are selling their German bond holdings. After all, even PIMCO is liquidating its European exposure: we would contend that China is not all that much dumber than Bill Gross.
From Bloomberg:
Finance Minister Naoto Kan cited “severe” job prospects this week as one factor that has kept the government from upgrading its assessment of the economy since March.
A separate government report today showed the ratio of jobs to applicants fell to 0.48, meaning there are 48 jobs for every 100 candidates. It was the first deterioration in the measure in eight months.
Takeda Pharmaceutical Co. aims to reduce its workforce by about 10 percent, it said this month. Asia’s largest drugmaker wants to save 50 billion yen ($550 million) over three years.
Japanese retailers continue to cut prices to spur consumer spending. Nitori Co., a furniture retailer, this week said it will lower prices of about 500 items by as much as 40 percent - - the company’s ninth round of discounts since 2008.
“Spending on some items, such as cars and home electrical appliances, are robust thanks to government subsidies, but consumers are still penny-pinching for everyday products,” said Daiwa Research’s Watanabe.
But can't Japan just print, print, print and stimulate inflation? Well, not really... remember that whole 200% debt/GDP thing?
The Bank of Japan has faced pressure to fight deflation from the government, whose ability to spur the economy is constrained by record public debt. Kan has been urging the bank to adopt an inflation target, and last week repeated that he expects it to support the recovery.
Central bank Governor Masaaki Shirakawa this week warned against becoming too fixated on prices when setting policy. Central banks should aim to achieve a stable financial environment that helps sustain growth, and price stability is “not the sole factor,” he said.
Japan's deflationary collapse has been blamed on the BOJ for not having taken the same abrupt and dramatic QE measures that the Fed has rushed into. On one hand, that is true, and is the reason why instead of burning out on a short-term sugar high, Japan has now seen twenty years of economic decline. On the other hand, it means that America will never hit Japan's sad record of 2 lost decades, as the Fed has already shot 5 out of 6 bullets in its gun. As Bob Janjuah pointed out earlier today, there is just one bullet left. And we have a feeling before all is said and down, instead of shooting the ever angrier bear, which is getting closer by the minute, Bernanke may decide to play Russian roulette instead.
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Ghidrah!!!!
Louder TD they are about to take my aussie stops out, is anyone paying attention, WASH RINSE REPEAT after me- the world will not end but will suck for those with rose colored glasses
Found this on JSM tonight. Please watch.
http://www.youtube.com:80/watch?v=H0a_FA_J6Sw
Ezekiel 33:6
Awesome!
FAN-FUCKIN-TASTIC!!!!!
"Dodecatuple Dip"
HA!
we're like Japan, only on a lightspeed course to catch up.
awesome.
The Tokyo core CPI suggests that next month’s release will show the May national CPI easing to -1.3% due to
the oil price rebound and the national core-core index steepening to -1.7%. The outlook is continuing declines
stemming from the large output gap and weak demand. Today’s labor market release showed unemployment
deteriorating to 5.1% in April (from 5.0% in March).
at least their banks are healthy...
ahahaha cant believe i just said that.
Wow, thats just great. Im sure Bernanke is loading his " What if Japan crashes" software CD in the Futures pump machine as we speak. Rally on. Green futures by morning. Nothing the machine couldnt handle
Tthis doesn't make Richard Koo's fiscal-stimulus (and extend and pretend) prescription look too successful on the face of it.
Japan's economy is the spooged-up slut of the world. Everyone else takes yen, leaves bonds.
I blame the fact that they blur the genitals in their porn. Healthy, robust private sector growth is rooted in hardcore close-ups of nasty parts, plain as day.
Just ask the SEC and MMS.
I just wanna know... who's gonna clean her up?
Speaking of blocking the nasty parts in porn, exactly what is that female doing behind the pink balloon in the Macys add.
From the configuration of her face I have to assume she's either blowing, sucking, or kissing something.
Couldn't imagine what it could be.
a
Japanese porn sucks Monkey shit. That blurring of the Genitals gives me a bad case of Blue Balls.
+10000000000000 yen
I had a good laugh at the rally explanation. "US stock rally on China saying it believes in it's Euro investments."
Well if you were the biggest investor in Euro bonds would you shout FIRE!!! Uh...no...you would try and sneak out.
Although I do my best to avoid drawing conclusions from anecdotal evidence, "anecdotal evidence" is beginning to add up to statistically relevant evidence, with that evidence being that the general population is not only stupid and fickle, but also completely incapable of drawing any logical conclusions.
Exhibit #xxxxxxxxxx:
And yet somehow the market is up wildly like nothing ever happened.
First post btw. Glad to be here. Been lurking for over a year, but I've decided to stop being such a wierdo.
I had a good laugh at the rally explanation. "US stock rally on China saying it believes in it's Euro investments."
Well if you were the biggest investor in Euro bonds would you shout FIRE!!! Uh...no...you would try and sneak out.
Homer Simpson: "Normally, I'm not a praying man, but if you're up there, please SAVE ME Superman!!"
Good God! How many sticks of dynamite have to be lit before one of them blows?!
Typical bankster attitude:
http://roosterteeth.com/comics/strip.php?id=1646
The fuses all have different lengths so that the explosions all occur at the same time.
WTF?
You can't force people to buy things. Japan seems to react to debasement and rising prices by, you know, buying less. Why won't these idiots realize this and start to raise rates then people will spend. Giving the Japanese a decent currency will stimulate demand and just might solve the population issue. Making the currency stronger makes having children, you know cheaper...
Hilarious.
China & Gross aren't getting out of the euro but are reallocating into bunds, as you want to be long the new D-mark. Bunds rally to continue...
Just posted a EURO monthly chart ...
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1
The crisis is Japan is just building and building is it not? They are hardly a great advert for QE but both the US and Uk and now Europe ploughed ahead with it anyway.In my places they have slipped off the radar because of Europe's problems, however I was looking at some analysis of them the other day.
"However there are clear challenges as Japan’s national debt is ballooning and looking forward she has an aging population. This aging population may help with her lack of domestic demand but then she will save less and so the deficit will be less affordable. Each time you think of a way out of this conundrum you hit another problem."
http://notayesmanseconomics.wordpress.com for those interested
Also not that the unemployement in Japan at 5.1% is much worse then in the US 9.2%. The reason is the ageing population where the workforce compaired to the retired class... is much smaller then in the US.
There about 1 person has to take care of 4 people through taxes.
If China comes out and states openly they are not selling, believe me they are SELLING. Who was it Wasgington that said "don't listen to what we say, watch what we do".
5.6% unemployment? We need a "recession" like that here in Brazil!
Still no hyperinflation in Japan. Wow the JGB bears were wrong or 20 years now.
> a lot of overtime work for the Japanese plunge protection team
It is called PKO, price keeping operation, here in Japan. I wouldn't know why Nikkei was up this Thursday. Some say it's because pension funds bought in, ohters say it's just because the market was at the bottom. Japan is really in deep trouble, politically. So, does anyone want be our prime minister?
The Japanese PPT?Probably the worst job in the world?In twenty years all they have done is buy the dips in a falling market, so will Liberty 33 have a similar track record in twenty years?Will the printing press combined with the PPT stop markets turning Japanese.....http://www.youtube.com/watch?v=kWAwrMFtSvM
What People don't ask themselves sometimes is can a country continue to grow indefinitely?
If a country like Japan has its population in long term decline,and is on an island with limited resource,how can they keep on growing?
Perhaps they reached their peak. . 20yrs ago
By the way the same scenario applies to the Europeans
so all the angst about Japan or the Nikkei,is misplaced in my opinion
THE WEST AFRICAN CHIEF