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Richard Koo On The Aftermath Of The Japanese Earthquake
Nomura's Richard Koo opines on the aftermath of the Japanese crisis: "n short, the view overseas is that a country with these national characteristics and this level of technical prowess is bound to recover. In that sense, I feel as though the world is supporting Japan from afar. This focus of global attention on Japan should reassure the government that it can take necessary fiscal measures without fear of being downgraded by overseas rating agencies. From an economic perspective, the short-term outlook is bleak, and demand fueled by reconstruction projects is unlikely to emerge for some time yet. But I am confident the Japanese economy will be able to pull through this disaster if the public, the government, and political parties on both sides of the aisle join together and work as one." We are confident that once the situation stabilizes, the Krugman in Koo will promptly reassert himself and note to readers just how great of an economic opportunity the massive rebuilding effort truly is. And few if anyone will retort that in the spirit of creative destruction where GDP can only go up but never down as a result of massive devastation, the world should blow itself up every year and be promptly rebuilt in the scramble to double world economic output by the year 2020.
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Somehow, economic talk in the face of what is unfolding seems unseemly.
Understand that money needs to be made/lost/stolen, but looking at an Earth Shaking Event (literally) and one that could poison the planet to boot, tens of thousands dead...
Folks gotta do what they gotta do I guess.
ORI
http://www.youtube.com/watch?v=gVoUDSZE-5c
http://media.adamdodson.org/index.php/Illuminati-Card-Game/japan
http://media.adamdodson.org/index.php/Illuminati-Card-Game/earthquake-pr...
http://media.adamdodson.org/index.php/Illuminati-Card-Game/earthquake
http://media.adamdodson.org/index.php/Illuminati-Card-Game/tidal-wave
http://media.adamdodson.org/index.php/Illuminati-Card-Game/atomic-monster
http://media.adamdodson.org/index.php/Illuminati-Card-Game/nuclear-accident
http://media.adamdodson.org/index.php/Illuminati-Card-Game/combined-disa...
Oh look, a bandwagon!
http://www.youtube.com/watch?v=sXMkJ9AF3z8
But isn't that what this site is all about? A heads up on profiting from misery. If not what is it about?
Truth? Or at least the search for it?
ORi
I take your point. But it is reassuring that those in charge of the financial system are keeping their heads, and not panicking or taking a nervous breakdown. Things are bad enough without that.
Really does not matter..another day of DOLLAR down stocks(risk-on) Love Citibank doing a fuck split...that use to be death at my firm...of course its good now.
Written in a taxi Yes I postulate
We are bravo 42.
Video close-up of water being sprayed on damaged reactor:
http://video.asahi.com/viewvideo.jspx?Movie=48464141/48464141peevee37831...
""Video close-up of water being sprayed on damaged reactor:""
...With Japan, Europe, North Africa, Asia, GOM, the whole world is in turmoil, makes Western Canada look like "the go to place."
Five Reasons Why Canada's Four Western Provinces is the Safest Quadrant on this Planet...
http://seenoevilspeaknoevilhearnoevil.blogspot.com/2011/03/why-canadas-four-western-provinces-is.html
Yep, that's where all the radioactive fallout is piling up.
The smart money has been dumping Canada's real estate since the reactors hit center stage on this Théâtre de la Cruauté.
If you keep telling everybody it soon won't be.
This issue of how you should properly measure economic growth was discussed last week It would appear that Richard Koo missed it! I found the economist Shaun Richards had some relevant analysis of the position.
@Josephine29
I posted something similar below, but Shaun Richards hits the nail on the head. These hacks think that wealth is never destroyed. Which, for the powerful and their fiat wealth, is largely true.
"the world should blow itself up every year..." C'mon, we're working on it, for Pete's sake.
The sun is rising and it's beautiful. Violet hues over the horizon.
"But I am confident the Japanese economy will be able to pull through this disaster if the public, the government, and political parties on both sides of the aisle join together and work as one."
You call that "arienai" in Japanese, or "impossible" in English.
TEPCO wanted to withdraw all nuclear plant workers 3 days after quake http://mdn.mainichi.jp/mdnnews/news/20110318p2a00m0na009000c.html
Disaster could cost Japan $235 billion: W. Bank http://uk.finance.yahoo.com/news/Disaster-cost-Japan-235-afp-1775034327.html
Swiss Re Estimates Claims of $1.2 Billion From Japan Quake http://www.bloomberg.com/news/2011-03-21/swiss-re-sees-claims-costs-of-1-2-billion-from-japan-earthquake-tsunami.html
More volunteers ‘prepared for death’ at Fukushima, 21 March 2011, Osaka (Agence France-Presse) http://www.hindustantimes.com/More-volunteers-prepared-for-death-at-Fukushima/Article1-675822.aspxSo they'll keep a bunch of bulldozers and cement mixers busy building public housing. It makes little sense to rebuild in the path of such massive destruction. Moreover, cost benefit is an issue since you are not talking about a region that is a huge economic engine. Mostly fishing and farming.
Those poor people stand no chance of recovering the quaint lives they once lived in the shadow of the 70 year tsunami.
The real impact is how this effects the mindset of your typical Japanese breadwinner. He or she lives an already densely packed life and this series of continuing events rocks the boat in ways difficult to comprehend. Risk aversion, savings and spending will clearly be impacted.
I wish you could see my view. It's burning my eyes.
I feel as though the world is supporting Japan from afar.
What Koo is saying, in code, is that BOJ has a total green light on QE and fiscal stimulus to infinity, despite debt levels at 200% of GDP, the highest in the developed world.
And Buffet this morning is providing confirmation of this view from the business community. In code: we won't dump your debt and sell your equities. Go ahead, print!
Buffett is such an asshole.
I agree, but at 200% debt/GDP and soon to be 250 to 300%, the ability to carry said debt even without a run will be called into question. Although no time is an opportune time for something like this to happen, this was one of the most innopurtune times and the chances of something else economic breaking are high, as is the chance that it will be transmitted outside of Japan.
But in today's world, everyone is going to run outrageous debt levels. So where else is the money going to runto? Central bankers are going back to the elementary student playbook: if we all do it, nobody will get in trouble
Reggie, I think the obvious answer is paying back the interest accumulated by the debt. Even at the low interest rates Japan is paying on debt, inevitably it will become unbearable to pay the maintenance costs.
Amazing how over a weekend, focus on Japan just goes away.
In today's world, there is no "cost" of a disaster or reconstruction in the traditional sense, since the central bank can just print up the amount lost plus the amount needed to rebuild. So where is the loss? If u can figure this out, you too can become a millionaire without paying taxes.
@Cavior Emptor These hacks can't think of one example where wealth would actually be lost.
Exactly. They only know one game, one move: kick the can. And if that spells disaster for the future, well, they won't be around to catch the flack. They'll sit back and criticize.
"In today's world, there is no "cost" of a disaster or reconstruction in the traditional sense, since the central bank can just print up the amount lost plus the amount needed to rebuild. So where is the loss? If u can figure this out, you too can become a millionaire without paying taxes. "
The loss comes to those holding the currency or its equivalent through inflation. Now tell me how to become a millionaire without paying taxes.
Where have you gone Sadaharu Oh, a nation turns it's lonely eyes to you, WhOH, OH, OH..WhOH, OH, OH...
http://en.wikipedia.org/wiki/Sadaharu_Oh
And the latest view from UBS retail research:
"UBS Weekly Guide: Japan Won't Derail Global Markets”
And then this:
Financial markets remain unsettled by a variety of global risks, this time with attention returning to the Middle East and North Africa (MENA). The United Nations Security Council passed a no-fly zone in Libya, with the UK, US and France all initiating air strikes over the weekend and the potential for international involvement to be much greater. Oil prices are again moving upwards, with the potential for unrest to continue to spread throughout the region. We adjust our US GDP forecast but do not think global growth is at risk, and therefore do not alter our overweight in equity markets.
Buffett says Japan quake a ‘buying opportunity’ http://uk.finance.yahoo.com/news/Buffett-says-Japan-quake-afp-3125922753.html
Here's What's Scary About American Investors Pouring Cash Into Japan http://www.businessinsider.com/investing-in-japan-2011-3Say no more ……….
Workers flee Japan nuclear plant as smoke rises
Is it just me, or wasn't AP a little better in the past about using alarmist headlines with little to no new information in the body of the article?
What caused the smoke? Can you say FISSIONING?
ROUND 70% OF THE NUCLEAR FUEL RODS IN UNIT-1 reactor have been damaged.
Minoru Ohgoda said: “We don’t know the nature of the damage, and it could be either melting, or there might be some holes in them.”
33% OF THE FUEL RODS AT UNIT-2 WERE ALSO DAMAGED.
FROM March 16, 2011: Staff Evacuated From Japanese Nuclear Plant http://news.sky.com/skynews/Home/World-News/VIDEO-Nuclear-Incident-Increases-Radiation-Has-Leaked-From-Fukushima-Plant/Article/201103315952984
UNIT-3 FUEL RODS ???
- "... but I still cannot bring myself to describe material that is still 95% potential fuel as 'spent'. http://atomicinsights.blogspot.com/2011/03/stop-worrying-about-spent-fuel-pool.html
- Radioactive FISSION gases and some of the fuel’s radioactive material in the form of aerosols into the building that houses the spent fuel pool and possibly into the environment. http://my.firedoglake.com/kirkmurphy/2011/03/15/why-fukushimas-spent-fuel-rods-will-continue-to-catch-fire/
- Fission gas release in MOX fuel assemblies may limit the maximum burn-up time of MOX fuel. http://en.wikipedia.org/wiki/MOX_fuel
Danger of Losing Control of the Reactor Is Greater with MOX
Conventional LWRs are designed to decrease the reactivity when the temperature rises.
- But when using Pu-239 as fuel, heating of the core from an increase in reaction rate tends to increase the reaction rate still further.
For UNIT-3: This is called the positive temperature coefficient of reactivity, meaning there is a danger of losing control of the reactor by accelerated chain reaction of FISSIONING. TECHNICAL ASPECTS OF MOX FUEL IN LIGHT WATER REACTORS/THE REACTOR OPTION http://www.nirs.org/reactorwatch/mox/puupdat4.txt
-
Fukushima Daiichi nuclear power plant at TEPCO, iodine-131 has been detected six times the standard concentration. Cesium is also found. Typical substances formed by the FISSION. Both were certain that the damaged nuclear fuel in nuclear reactors and spent fuel pool.
The Tokyo Electric Power, 19 airborne material collected from about 200 meters northwest of No. 1 were examined for the first time after the accident.
As a result, the concentration of iodine 131 was 5.9 per 1cc Miribekureru. Continue to smoke one year, exposure to 300 mSv (nuked), but concentrations. Workers, are working with a mask to enter the body. This also found that iodine 132 Miribekureru 2.2, 0.04 Miribekureru 133, cesium 134 and 137 are both Miribekureru was 0.02.
You must bring a nuclear device Hukushima second analysis was time consuming. (Google trans from Japanese) http://tinyurl.com/6zzems2
You realize that posting in the manner that you did, says that you have no idea what you are talking about. You are simply cutting a pasting and throwing this against the wall in the hope that something sticks.
now what?
the long waited Jap nuke 'disaster' expected by ZH didn't come.
must be pissed off!
Here is an idea, why don't you head to Fukushima (check priceline, pretty sure you can get a REALLY cheap ticket) and report back on the "disaster" that didn't happen.
What does this look like ? Fukushima I Nuclear Power Plant Reactor 3 explosion on March 14, 2011 http://www.youtube.com/watch?v=T_N-wNFSGyQ
You realy think the Spent Fuel pool is still intact? LOLz This is a PLUTONIUM MOX Reactor DUDz!!! Damaged nuclear fuel in nuclear reactors and spent fuel pool! (According to the Japanese themselves) (Google trans from Japanese) http://tinyurl.com/6zzems2
Top of Unit-3 has been completely blown off including the fuel and spent fuel cooling pond. http://forum.prisonplanet.com/index.php?topic=203916.msg1218401#msg1218401
A) The 6-inch thick metal reactor containment vessel has blown up inside the concrete primary containment wall which is peech shaped with at the top the weakest point - the fuel transfer gate.
Or B) The fuel burned it's way trough the containment vessel and exploded underneath in which case the 6-inch thick metal reactor containment vessel would be blown out like a cannonball.
Either way the the concrete primary containment wall worked as a canon when it blew up sky high directing the explosion force straight up which can be clearly seen.
Sell CASH Short cash - these interventions are gifts.
buy gold and silver and everything non-cash.
Long livwe Zimbabwe.
Well wasn't Chernobyl a massive buying opportunity?
I mean just because 25 years later, the area is still completely uninhabitable, and the surrounding areas are still producing 5 limbed, no dick kids, does not mean anything right?
Are people really this retarded (rhetorical)?
I wonder what aliens will think when they arrive to find us engaging in human sacrifice and flower wars?
http://en.wikipedia.org/wiki/Flower_wars
Today's action should tell you that central bankers are fighting back now that they've blown it by showing their cards at the poker table: Japan was allowed to print and bail out their stock market. US prints new QE money daily and Euroland will be printing until the next geologic era. But the side effect is soaring prices for natural resources so they're intervening like crazy to quash speculators. Check out the dollar ! :-) Look for this pattern to keep happening over and over and over until they issue price controls
Reverse Splits always go down hill when the weight of the paper takes hold from gravity of Obligations.
....and when there was no crawdad, we ate sand....
Proclaiming great news with electric power back on to #4 and #5 was happy face BS. Many news agency's reporting important gains made in resolving the problem. They are misleading the public on the extreme seriousness of the situation. Their mention again of massive damage to #2 #3 #4 suggests to me that even with full power restored, these plants are unable to function.
The Happy Face you refer to masks the tears that Tepco must be feeling when they reckon that the materials of the plant is not worth the scrap value in weight and far exceed any reasonable revenue due to the cost of the problem.
I said a few days ago, better to burn out the place and have it fall into the ocean and endure a classic seaward fallout as we used to do in the big H bomb tests in the Cold War Era.
However, we are human and some of us will remain on the job until they drop dead trying to save tens of thousands or millions from a horrible situation. There were moments where I might think to bail but held on for the ride because, just maybe for a chance or luck we get through this yes?
Remember also, that these are the People who were Nuked Twice during war and those two cities are back up and running.
Also we should learn that when Plants such as this one gets old, say 30 years on. They should be shut down and either rebuilt or scrapped. But no, there is no Yucca Mountain to send the spent fuel. They should have shipped it to Russia to put on the big rockets they have and sent the stuff to the sun.
Maybe we should leave Nuclear alone and move on to something else.
Koo's overal thesis is that Japan did really well under the circumstances where the real estate was down 87%, and the government did what it did to support the people. He came up with the phrase of "balance sheet recession". This is essentially happening in US. The earthquake and radiation disaster is additional to the pre-existing condition, and if history is the guidance, Japan will recover from the disaster. I agree with him so far. However, the world today is different from the 90s, and every country is loading up big dose of debt. It is a open question if we can recover, or how long it will take to recover to where. a lot people start their predications way before the reality set in, and their words are just pure BS without even a smell.
Debt yes. So nice, warm and fuzzy to solve problems right now with debt.
Raise the Interest 1% and behold the groaning and wailing when the floor gives away under the weight.
I bought a car back in the 80's when banks paid 15% to people to open a CD account. It was one of the worst decisions I have made.
Should have taken the CD for 10 years and held on to my V8. (And I thought gas was expensive then)
This article could almost win the "most pointless worthless useless pile of turd shit that is of more use for wiping your ass with than taking seriously" award for March 2011. I have better things to do with my day than rebutt the merits of this article, as I fear even thinking about it may cause me irreparable damage, perhaps even blindness.
Yet, despite it being 'most pointless worthless' you still thought it worthwhile to exert yourself to post a response. It must've been more worthwhile than you're willing to admit.
Too bad you didn't have anything worthwhile to add.
Existing Home Sales : OMG !
May as well stay in for the river card.
Time to go long Personal Protective Equipment like Self Contained Breathing apparatus. For example, Mine Safety Appliances (MSA) issues a Nuclear Radiation and Respiratory Protection Advisory in Japan - http://bit.ly/hLsKn1
Customers currently located within Japan who wish to purchase respiratory protection for use against radiation should contact MSA Japan directly.
Versar (VSR), with subsidiaries Geomet and Professional Protection Systems, is a good play on decon suits, buildings and equipment. Just purchased in 2010, PPS already adds a decent percentage of tiny VSR's revenue, and that was before a meltdown. With security and safety issues being raised everywhere, there could be some stocking up for preparedness or a replacement of older equipment. Watch and see.
- I hope they do
http://apnews.myway.com/article/20110321/D9M3I3V80.html
FUKUSHIMA, Japan (AP) - Operators evacuated workers from Japan's tsunami-damaged nuclear plant Monday after gray smoke rose from one of its reactor units, the latest of persistent troubles in stabilizing the radiation-leaking complex.
The people trying to downplay this crisis are nothing short of vermin. Keep touting the 'no deaths' card all you want, and pretend it doesn't dishonor the people who are putting their lives on the line and won't be granted a swift death from the ravages of radiation related disease.
Due to the near non response by the USA & the US puppet IMF telling Japan so sorry, you have enough money to rebuild things yourself...
Japan SHOULD sell off US Treasuries & make some noise about entering the Russia/China/India bloc.
After being bombarded by the Indonesian tsunami victims plight then Haiti & others...the lack of speedy aid to Japan is apalling.
This is probably a little late to reply, but if you are going to be appalled, be appalled at the Japanese authorities. I suspect you do not have a lot of experience with Japan. If you did, you would understand that they can be rather pedantic and stiff, and tend to create their own obstacles. For example, Japan has a one month quarantine for all dogs entering the country. When the first rescue teams arrived from the US---with their dogs---they ran into the bureaucracy that is Japan and had difficulty getting their rescue dogs released. In the meantime, survivors were still dying in the rubble. Japan also restricted aid if it was food based, since their bureaucracy must check all incoming foods plus protect domestic producers.
The US did just fine offering help in a variety of humanitarian and technical fields, but it is up to the Japanese to either accept or reject the offers. Many were rejected, especially in the initial stages of search and recovery.
I think I have an engineering solution. Build a polder, i.e. a perimeter berm of earth and precast concrete bridge parts or concrete rubble from adjacent buildings, using the turbine halls as one side of an enormous rectangular dike around Reactors 1-4, at least 30 ft tall, then fill with seawater. Hitachi makes high volume utility pumps. 24" pipeline from ocean to polder.
Use the towers to rig firehoses that spray continuously while building the perimeter dike. Send the fire engines home or use them as scrap building blocks for the dike. Need a fleet of Israeli bulldozers.
Stocks and flows, stocks and flows, people.
Even if productive capacity is not so destroyed that GDP dips, an increase in GDP is a flow and says nothing about the stock destroyed by the earthquake.
Somebody go tell the Keynesians that.
..and yet another positive spin on an absolute disaster that will take years (and massive $$$) to recover from.
Richard Koo is interesting, and even quite radical and pro-populist in some ways.
In this piece above from 15 March 2011, Koo's fascinating take-away point is that what saved Japan from being a disaster over the last 20 years - unlike the current USA situation - is that they kept employment and wages HIGH ...
This raised final demand and enabled Japanese companies to continue to profit in their home market, whereas the US is in a squeeze-collapse scenario because the cash-rish companies have no domestic customer base, among the US workers that the US oligarchs have impoverished.
Another thing Koo points out, that 'Tall' Paul Volcker himself, managed aspects of the late-1970s-early-1980s crisis by a graduated-process 'speed limit' on debt writedowns, and that Volcker maintains this view today in regard to the current crisis.
This in contrast to the popular current view - of Karl Denninger etc., and often advocated on ZH by many as well - that the 'way out' is a Warren-Harding-1921 style instant collapse and write-down of all the bad debt in the system, as happened in the more primitive USA right after World War I.
Koo's view is that the systemic effects of instant writedown are too catastrophic now, and that extend-and-pretend is thus actually logical in the big picture, much as it doesn't square with a certain sense of orderliness ...
Maybe the reason Americans hate extend-and-pretend so much, is that they are being so royally violated and abused and neglected in so many other ways. If they were maintained with decent minimum wages and living standards, like in Japan or in Continental (north-)Western Europe, they might be much happier with the programme.
In Richard Koo's core view he seems to agree with Henry C K Liu on Asia Times Online ... what counts is supporting worker's wages or equivalent, to keep good demand going ... The similar 'socialism' in Western Europe, in other words our wage protection & social benefit protection - maybe is why we are doing all right here on Continental Western Europe, as the Japanese did OK despite their two recessional decades.