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Japanese Economy Collapses: Q1 GDP Drops At Double Consensus Rate, Epic Nominal Plunge Of -5.2%
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.
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it's that Arnold's love child is so much more important.
hopefully the mother was at least attractive......though the homely wifey did have quite the bankroll I suppose
Whatever happened to those melty nuclear reactors in Fukushinma? They must of vacuumed them all out and got em all refueled and up and runnin, right? I mean I don't see nothin in the news no more, so it must be all fixed.
gonna buy me a Honda and a Toyota, I needs a jet ski and a chicken in every pot.
Obfuscation, prestidigitation, misrepresentation, propaganda, it just wouldn't be the "news" without all the hocus pocus by the usual suspects.
Pretend the inane is important, and pretend the important is inane.
showin us smurfs in wolves clothing and pirhannas dressed as busty mermaids... your mainstream news.
If you REALLY want to know how she looks...
You get a junk for that horrible photo....
I couldn't believe when I saw pictures of the homely bitch. Arnold couldn't find a better shot of strange than that? I thought you hired ugly women to work in your home so you didn't have to worry about fucking them. The man is dumber than he sounds.
Actually the govenators situation is pretty important.
Timmay is going to be sidelined adjudicating his tax records. Was she actually employed as a house keeper? Or was she a wife? If she was the real wife, then Maria has some explaining to do about her 1040s.
How do we deal with the kids? which ones were dependants and which ones were staff?
Al Capone and Joe Kennedy have a running bet going in the afterlife.
Those who have not ears, let them not hear.
“We look for a classic V-shaped recovery in the July-to- September period and after,”
Ah, looks like that seemingly attractive whore - Rosy Scenario - is making the rounds in Japan as well.
Rosy is HOT...in a radioactive sense anyway.
Better Rosy Scenario than Rosey the Riveter.
See.. here's the point I don't get -- and to the point -- please keep in mind that I'm discounting the whole 'duh' moment here and the associated responses that I consider trolling; I totally get the fact that the sheeple are stupid and would bury thier collective head so far up their collective asses to the point of choking.
Even to the most non-observant person that casually heard about the Japanese earthquake/tsunami on the day it happened; perhaps on the way to work or via word-of-mouth at the water cooler. Are people really, I mean REALLY that stupid that they think it would not affect production values and/or quotas? Much less contractual and/or assumed values in said future (i.e. obligations that Japanese companies would have prior to said event)?
I mean really?
I get we're in a JIT world and a JIT economy.
Trust me, I get it.
However, the worlds 3rd biggest economy has a 9.0+ earthquake with associating tsunami -- not to mention Fuk-U-Shima and it's collective clusterfuck -- and it has no ripple effect to the rest of the world? How many times has CNBC, Reuters, Bloomberg,CNN and the associated 'approved avenues of propeganda distribution' assured and poured salve on the collective idea of a wound? Do we even hear about it anymore?
Ugh. Sorry. Rant off. Just sometimes I cannot keep it in. I get it. Our time is coming and all that.
Fuck.
The disaster didn't affect them personally, therefore they have no perspective or true understanding of the long-term consequences.
They suffer from chronic cognitive dissonance. Attempt to wake them at your own peril.
+
And keep in mind, they're gonna wake up swinging!
Nice rant. I told a cashier that the fda found arkansas milk had the highest level of radioactive iodine in the nation.
I just got a blank look.
Maybe they don't trust the FDA? :-)
Our second biggest selling piece this year in Peru was made by the small specialty bearing manufacturer in SW Japan. We were hoping to get 1000 pcs, we will get 0 in our current order.
Looks like we were wrongly informed about certain bearings being available as planned.
This is not good for us.
...
Supply chain issues have not just started to affect the Japanese or the US auto makers (getting some components from Japan).
This JIT interruption issue looks like is about to become a BIG STORY before long, not just for marginal bearing importers in Peru.
There is going to be scrambling, scrounging, and.hoarding in various industries. I wish i knew which ones.
Should we short your small peruvian company? How?
We are not listed, as we are small. A family owned company...
I have told our company, Ameru Trading del Peru S.A., to BUY bearings that will be in demand there...
Whether Korea and Japan does what we ask, as small importers.
I have asked them to be AGGRESIVE re buying bearings in short supply, but you never know when dealing with companies bigger than we are...
You can order but can not take delivery of Lenovo laptops with solid-state discs!
I am looking forward to dumping a couple of kg's worth of obsolete memory on ebay - the factory, Hitachi Chemical, who makes the epoxy for all the chips in the world was put out of action by the tsunami!
Expect everyone to use shitty Chinese epoxy and then watch failure rates explodes about 14 months later - ala Hitachi HDD's.
We're seeing similar supply issues for electronic components. Had to scramble last week to find needed parts and got lucky that another distributor had stock on-hand as factory lead-times are around two months or so they claim. But I am expecting that the supply issues will be ongoing, and lots of final products won't be completed due to a lack of vital components. I'm now paying much more attention to country of origin, but I suspect it will only be a matter of time before some parts become unobtanium.
Nikkei totally unfazed...I thought it would roar. Fuck it! I am pissed off though because when I heard the news I immediately paid an offer around 1339.91 (S&P futs). Now its offered at 1339.58. That's USD33cents I have blown through being impetuous. I was CERTAIN this was a market rallying announcement...I'm pissed off. To put that 33cents into perspective, it's a third of a bus ride from my office in the CBD to my home in the leafy (except it's Autumn now) inner city suburb of Parnell...ONE-THIRD!!!! I think these markets are being controlled...call me a tin foil hat wearer but there is definitely something suspicious with these markets.
PS: has Barry Sotero got a US passport or does he use his Kenyan and/or Indonesian one?
Barry's a company man, and as member of the CIA he has a different passport for each day of the week and a couple of spare ones in his bug out bag, next to the roll of hundreds and his secure phone.
.
Another piece of bad news that will probably be shaken off. 20-year bear markets don't last forever.
I'm sure that the BoJ has a task force going studying and researching right now, figuring out how to replicate Bernanke's "Financial Miracle" here in the U.S. since the 2009 lows.
They will be adopting their own version of "Quant Sleaze", which will simply send the Yen up even faster, and millions of Japanese housewives will continue to gangbang that trade, as they are now the biggest drivers of all JPY crosses.
The coming "Consumer Spending Boom of Epic Proportions" which the U.S. market is pricing in already will probably result in booming auto sales and manufacturing in Japan, and the "resilient consumer" will lift that country out of the hole.
Besides, the Japanese consumers are also among the most fashion conscious, and after 20-years of misery they have had enough gloom and doom and are also probably ready to spend big.
In fact the only reason Tupperware, Herbalife, Coach, Abercrombie, etc. are rocketing is because of potential sales gains in Japan.
Really. '20-year bear markets don't last forever.' OK, I'll bite. Let me guess.
They last . . .20 years?
Oh yeah, the point you make about how misery -- earthquakes, hurricanes, tsunamis -- is good for stocks is provable bullshit.
@Re-D
Didn't you see? RT articulated it PERFECTLY!... U see, here's how it goes...
a) 20-year bear markets don't last forever...
b) Robo is "sure that the BoJ has a task force going studying and researching right now, figuring out how to replicate Bernanke's "Financial Miracle" here in the U.S. since the 2009 lows."... We'll leave aside the fact that the Bernanke "Financial Miracle" (otherwise known as QE18), was 100% based on the outstanding success that the BOJ model foretold... We're now just in a continuous loop nightmare...
c) Millions of Japanese housewives will continue to gangbang that trade (only problem with this, is that DSK is in Rikers at the moment)...
d) "The coming "Consumer Spending Boom of Epic Proportions" which the U.S. market is pricing in already will probably result in booming auto sales and manufacturing in Japan, and the "resilient consumer" will lift that country out of the hole"... (I think he's referring to those 'Mericans who are FLUSH WITH CASH from their minimum wage jobs at McDonalds waving geiger counters over showroom models of 3 wheeled Corollas)...
e) "The Japanese consumers are also among the most fashion conscious, and after 20-years of misery they have had enough gloom and doom and are also probably ready to spend big"... (In "ROBO-ese"... I think he has 2 words for you... RURU REMON!... Go long LULU bitchez!)...
---
Tomorrow, (s)he'll be around to tell you why your bearish equity position strategy is flawed, why PM's suck, eh... basically which stocks were 'greenest' on the hot wall, and act like he'd predicted that the day before...
"20-year bear markets don't last forever."
You have "forever" along with a time-frame. It's an idiotic statement in the least.
If you are trying to imply that we cannot have a permanent downturn, guess again. When the lights go out (TEPCO, BP) how do you think that they're going to come back on?
There it is, some piss-ants junking me because they can't wrap their tiny brains around the fact that growth is DEAD. How is it to live in a constant state of denial? But, good for you, I need more compost...
I've put my retirement funds into a Dodo farm. The market has been depressed for so long, it must improve from here.
imo even after a 20y decline the nikkei is still 50% overvalued. That goes for the automakers too.
In fact the only reason Tupperware, Herbalife, Coach, Abercrombie, etc. are rocketing is because of potential sales gains in Japan.
WRONG!
Tupperware, Herbalife ?
The reason those are doing well is that every out of work person see the ad for selling one of those with hardly any investment, and a 'Chance' to make money.
If there were'nt a HUGE supply of unemployed people, they would NOT be doing well at all.
as for Coach, Abercrombie,
These are doing well because (for the moment) the Rich still have money.
Your walmart shopper doesnt' buy from Coach.
Those four companies have TWO different reasons why they are doing well. One because of 'More Poor People grabbing at making money.
The other because the 1%ers -> 10%ers still have money to spend, or at least their wives/girlfriend/mistresses do.
Harry wanger is gone
Spalding doesnt come around as much anymore.
Mathman and Dangertime dont do anything for me.
I wanna have your baby.
+++++
U da troll! Hahaha!
What would precede "JR." in this case?
Robo's on to something...this company is gonna be HUGE!!
Buy the fucking cravasse-like dip,with tentacles and Hydra heads and lava and shit flyin' out of it!!!!!
...bitchez....
Maybe GW Bush should go over there and give them a pep talk: keep on shopping, make the pie higher!
Now I know where Lawrence Yun got his education. And these folks all preach from the same hymnal. Transitory and temporary. We heard it with "sub-prime", inflation in basic goods, deflation in dollar denominated assets (especially RRE) and we're still hearing it. When Japan starts having to relocate key industry off shore in Q3 '11 - Q4 '12 we'll hear that those moves are temporary & transitory as well.
Sorry for OT but this news may be relevant;
Reactor No. 6 now has over 6 feet of contaminated water in turbine building — Water in reactor building may cause cooling system to fail
May 18th, 2011 at 05:42 PM
Poor estimates force timetable revision, Yomiuri, May 18, 2011:
... In the turbine building of the No. 6 reactor, for example, contaminated groundwater has seeped in and accumulated to a depth of up to 2 meters. If water flows into a reactor building, the emergency power system to cool the reactor may stop operating. ...
http://www.yomiuri.co.jp/dy/national/T110518005659.htm
--
Which means the foundation of No.6 is all cracked to buggery, allowing salty ground water to seep into the burried portion of the lower containment.
Happy nominal GDP guesstimating.
Element - Thanks for the link to the news site, which also has this news about the workers conditions.
"Better facilities for workers
"At the strong request of the Prime Minister's Office, TEPCO included measures to improve the working environment for workers at the plant.
"Giving consideration to the workers' health in summer, when working conditions are expected to worsen, the measures are aimed at improving accommodation and resting facilities for them.
"TEPCO plans to build a makeshift dormitory of 1,600 rooms at J-Village, a soccer training facility currently being used as a base for those workers. The new facility is expected to be made available for use as soon as July. The number of rest areas in the power plant will be increased to 10 from the current three. Better meals have also begun to be provided to the workers.
"Thirty workers have had external exposure to 100 millisieverts of radiation or more. To reduce radiation exposure that workers might face in prolonged operations, TEPCO plans to cover pipes and hoses, through which highly contaminated water will flow, with lead mats. It also plans to provide workers with protective suits that are more effective at blocking radiation than those currently used."
Doesn't say if they get their first bone-marrow transplant for free though.
Maybe that's a bit academic anyway ... thought the Chinese had it tough ... working in ultra polluted conditions.
God help them
Another gobsmacker, fresh from NHK;
TEPCO says it’s “difficult” to start injecting nitrogen needed to prevent blast at Reactor No. 3
http://www3.nhk.or.jp/daily/english/19_23.html
--
Get that? ... they think that if they don't act now, and risk entering No.3, it's probably going to blow ... they're not confident they'll succeed preventing No.3 containment blowing up ... that's happening right now
4 week average Oil product consumption is down 3% from same period last year.
Unless during the first 72 days of the quarter the Japanese were unconciously aware of the events that were coming and lowered spending, this drop in GDP is huge given only 20 days of the quarter were after Fuki. Wow.
Told Mrs. Questions same thing.
Natural disasters, a real growth industry.
they're a Keynsian de-lite
What's better than a broken window - 4 broken Nuclear Power Plants and a Tsnunami battered county covered with nuclear waste. The Glasier is getting a hard on!
So....everyone knows the printing is coming....why isn't the yen tanking?
and if you take into consideration that these numbers are "cooked" to relate a positive side to the situation, (a little humor there), then all is going to be well in the Land of The Radiating Sun. Just ask RoboTroll, things are just "GLOWING"....................
Speaking of collapses did anyone here notice SPLS off 15%?
Yeah, it seems the small and medium business customer is not doing too well these days.
My call for what that's worth is the YEN and the S&P are headed in the same direction this time so am short both.
If I am wrong then I live to trade another day. If right, then look out below.
Ths is a complete lie.
Take the 2008 crash multiply it by 50 percent and that's the cliff we are seeing.
BIG BIG SCARY JUMP.
Any big cap stock is carying 30 percent or higher accounting fraud on sales. Becasue they got all the 401k's and retirement funds parked in them and are just counterfeiting the dividends. Cut their sales by 30 percent throw in a 40 percent sales cliff dive and you are looking at price earnings that just cut your balls off and juggles them. I'm not saying the market is going to crash I'm just saying the amount of fraud necessary to keep the image going is going to be extremely dangerous.
breaking news >>>> DSK just resigned.
the full story is...
DSK just resigned for better food and a blanket.
no, he said, 'if someone doesn't send a maid to clean my cell, i'm resigning.'
Well I can say with certainty that all our supplies that came out of Japan are now delayed at least another week and the price is going up based on scarcity. Frankly a ton of overseas supplies have gotten this far post-Fukushima on shuttling WIP around the globe. Now people are starting to realize that all those little old ladies in the Japanese countryside subsidizing that JIT inventory are gone gone gone.
Just an aside, but my lawn (California) is not growing the way it normally does this time of year. I laughed at folks super worried about Fukushima fallout (I was one), but now I am going my third week without mowing the lawn and wondering if there is something creeping around the environment. Maybe its just the wet weather and cloudy cold skies, but something wicked this way comes.
I'm a ways up north of ya, and grass (and other non-garden stuff) is growing like nuts. A couple nice days have allowed me to go stomp stuff with the brush hog...
Nikkei down a paltry .25% on that news.
Probably be green again by the end of the week.
Classic and sadly I wouldn't doubt the fact that their computers do have a F5 function for printing in billion round lots. This is the reason the bankster cartel, IMF/Worldbank, and central banks are so harmful for the real economy-- as natural disasters arise and difficulties become the norm for a society (i.e. society's greater problems go unanswered, ignored, and perpetuated) the only answer they have is to inflate away their respective currency which only helps the top 2% (more often than not a result of crony capitalism in some form or another) and the rest get screwed. This is almost like reverse darwinisim-- it's not survival by the best evolved, but by those most willing to sell their soul for a 6-7 figure salary.
For Japan, the last thing to worry about is the economy. Wait until northern Japan (including FUK U Shima) begins to sink into the ocean along with the handy dandy GE nuclear reactors.
Fuk U Shima.
Not to put too fine a point on it, but the “Fuk U” telegram is glaringly obvious and clear, at least to me. I get it, I really do, even if not many others seem to (at least not yet).
So what does Shima mean? Well, it turns out that Shima has two meanings: 1) Shima Province in Japan and 2) an American Indian name meaning “Mother.”
Shima is also a personal name in Japan, Iran and Java, as well as a geographic place name and suffix for geographic place names in Japan.
As in Shima Province and Hiroshima, on which city the USA rained nuclear fire in the closing days of World War-II.
Hiroshima.
Fuk U Shima. Is it coming into focus for you now?
The meaning is: “Fu*k You Shima, i.e., (Japan) and Mother (Earth) and people who use the Shima name: Japanese, Iranians and Javanese.
And for the traders, I'm sure you'll find an angle on this but please be aware that your world is crumbling and your trades may not place as usual.
Fuk U dog.
A trader is the last person who needs your advisory or assistance, or the advice and assistance of any government either.
If it all crumbles around us we will find something else to trade, msybe muslim african negresses again.
But...but...didn't Goldman....didn't Deutsche Bank both say the tsunami.,.....the earthquake...the destruction was "bullish" for the Japanese GDP?
i can't wait for the action to kick off. This is going to be epic. Even if we get actual doom and people turn into rabid zombies and the entire monetary system develops a case of projectile diarrhea, at least you can say you were there. The only reason I want things to stay manageable is so I can catch the big 4 @ yankee stadium in september. After that, I don't care what the fuck happens. Rock on.
http://slv.collective2.com
So it's THIS guy's wife that's sitting on all that JPY?
stock markets dont care....its all about the money flow...
After Japan is it Germany next?
Off topic, but ....thought you might be interested.
YouTube's Harisebon7777777 should be commended for his work on measuring the radiation levels in Tokyo. The device he uses costs about $1000, which I am sure he has paid out of his own pocket to provide us with the truth of what is really going on in Japan.
It is eerie to watch his videos. Typically, his hand is shown holding a geiger counter in some public place with people walking all around him as if there was nothing of importance going on; while all along, the geiger counter in his hand reveals what is really happening. Harisebon is documenting the slow irradiation of the Japanese archipelago. A visual unfolding of a tragedy.
While watching these videos. it is hard not to wonder how many of the folks one sees walking down the street will come down with cancer in 10, 20 or 30 years.
Go to Harisebon's YouTube channel and give him a shout-out. He deserves it.
http://fukushimadisaster.blogspot.com/2011/05/radiation-harajiku-omotesa...
Japanese Black Swan http://www.youtube.com/watch?v=9FslgroEjQs
...and Spicoli http://www.youtube.com/watch?v=-ZQwnJTPh-M
P.S. Tyler, that'd be >>Black Holes<< ''these morlocks cralwed out of''.
http://www.youtube.com/watch?v=0Y6n9qRW23k
shadow shoguns
I love you Japan
I AM So sorry Japan
client
Can someone help me out here. Is this a blip, a spike or just the weather?
Found you Hamy Wanger!
Finally I get some recognition round here....
Thank you Element for your good postings. The apathy dis-ease is rampant among the mass mind as in normal in these last days of Pompeii.
Might as well as finish off the carnival tonight with a laugh...
http://www.angelfire.com/ak2/intelligencerreport/girls_prank.html
...and some higher education:
http://www.southparkstudios.com/
So, I have to ask, is the Yen carry trade finally over? IMO, I would have to say that it is, because a contraction of this magnitude on Japan (who has had to print trillions just to stay even) is not one the the BOJ can easily overcome.
I'll say it loud and with force, "THE YEN CARRY TRADE IS HEREBY AND ENTIRELY OVER...DONE...NADA...ZIP"!!!
And, thank goodness. That train went on for far too long....
Japan is the American Empires India - if yee lose production / control on those islands the Dollar is toast.
double post
...bbb..b.b...b.but Tyler - they told me that Tsunami's were good for GDP.
Does this mean they're lying about 'other things'?
Into the mind of the sheepeople we go...
Y.A.U.T.E.: Yet Another Unforseen Tsunami Event...
Silver today is as cheap as we will ever see it. Gold is even cheaper.
Sometimes it takes a head shake to realize wherst we are.
Japan and her zaibatsu have turned their fortunes upon China where they will take advantage of lower costs and increasing wages to earn record profits that they can export home to create countless white collar jobs with endless meetings accomplishing very little beyond agreeing to meet again.
On the domestic front Japan is pretty much doomed, but the corporate structure has hit a homerun overseas. Now if they can somehow convince the Chinese to drive Honda and Nissan they can drive a wedge in the German market share of the auto industry.
I am here on the ground in Japan and can tell you that the belt tightening started when the Yen went below 100 to the dollar. Its now in the 80 range with exporters crying that they cannot make a profit sending their stuff to North American to be consumed thus pussing the decision makers to more fully embrace the China gambit.
Actually on the face of things the 2 cultures can really create a kind of synergy but have to overcome their absolute joke governments for any real momentum to gain traction.
Plenty of money for loans. Your mouth would water if you knew what my mortgage rate was :)
dp
Assuming that the fall in Japanese GDP is because of the tsunami/earthquake, the thing hit on March 13. That's like 2 weeks for 1Q? Electricity is not fully restored and they're probably importing a lot of things to rebuild the country. 2Q GDP might look worse than 1Q.
"2Q GDP might look worse than 1Q. "
Ya think?
Yes. That's why I posted it.
This must be bullish for all paper assets!