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U.S. Must "Man Up and Take the Pain" or We'll Become Japan
Fears America is "turning Japanese" have been rampant ever since our real estate
bubble burst.
Just as Japan's policymakers were unable to stave off deflation after their
credit bubble burst in 1989, despite their best efforts, conventional wisdom
holds that all of Ben Bernanke's "reflation" policies will ultimately be
overwhelmed by deleveraging and debt destruction.
"There are a lot of similarities," says Vitaliy Katsenelson, chief investment
officer at Investment Research Associates in Denver. "We're not Japan quite yet
but...we need to man up and let the economy work itself out."
Noting the painkiller Vicodin is the most prescribed drug in the U.S., the
money manager says America has to learn to deal with some short-term pain, or
risk following Japan's grim path.
Vitaliy N. Katsenelson, CFA, is Chief Investment Officer at Investment Management Associates in Denver, Colo. He is the author of upcoming The Little Book of Sideways Markets (Wiley, December 2010). To receive Vitaliy’s future articles by email, click here.
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http://www.youtube.com/watch?v=gEmJ-VWPDM4
The Vapors - Turning Japanese
That song is from 1980... are we still turning? that was 30 fucking years ago? still turing? really? seriously?
LOOK! the answer has been given here time and time again...
For there to be no us and them... we all must be them.
so either we become ignorant, or we educate the masses...
and since we cant undo our knowledge and the masses dont care... we will suffer with them, we will be them that way.
Heavens to Betsy we'll be lucky if we become Japan. Japan is better equipped in many ways to deal with a progressively worsening (as I see it) economic crisis than we are. For instance their lopsided demographics are temporary. Thanks to our non-immigration policy that results in an immigrant pool heavily weighted in third world peasants, our demographics will go from worse to a different kind of worse.
And I'll be happy to trade American style reality shows for Japanese style game shows any day: http://www.youtube.com/watch?v=5T0SljIycCw&feature=related - We could even let Joe Biden host the most popular one after his boss gets impeached. Americans are very gracious that way.
You are correct and I've been saying as much since the beginning of this crisis. Painful, yes, but ultimately necessary. Except there is no leadership in this country. George Bush was in the perfect position: a lame duck President, his party already out of power in Congress, and little time left on the job. He should have done what was absolutely necessary and forced the banking system to take their medicine. Extinguish the debt, experience a massive recession and rebuild from the ground up into a robust recovery. And he blew it.
I saw the lines at Target, Best Buy, etc. for black Friday, and the people stampeding in the doorway to get the 60% off merchandise and I couldn't help but think: "have these people saved any money somewhere? How many of them are out of work right now? have we learned anything?"
Sadly, my worst fears when this crisis began are coming true: we've learned nothing, we are soft, and the consumer will revert back to overconsumption as soon as possible. We are too far removed from the depression such that there are too few left to share the horrifying experiences and lead by example. Instead we have the boomers, the most spoiled, overindulged generation (sorry boomers, it's true) raising another spoiled "gotta get mine" generation (that would be more or less my generation) right behind them. My view is that it will take years of stagnant growth and people learning all over again (many for the first time) how to live within their means. Again, a little leadership would be nice, instead we have Romper Room in D.C.
Ultimately, we've learned nothing from this.
"Keynesian" Stimulus has put Japan into permanent decline and between their demographics and 0% savings rate; they have no avenue for an exit. Government bankruptcies in Europe and Japan will prove to be very painful for the older people that have no avenue to go back to work. The older Japanese saved a lot and put most of it in banks, Japan Post and Insurance Companies. Japan has twice the total bank deposits as the entire United States. The Japanese have lost more wealth than any other society and it is not over. Stocks are down 75% over 22 years and real estate is down 50 to 70% over 20 years. The "Keynesian" stimulus spending is about to destroy their banks. The government has borrowed too much money. The banks own too many government bonds and the inevitalble fall in the value of those bonds will destroy the capital in the banks. The Japanese (banks, insurance companies and people) own their own bonds and the wealth destruction we are about to see will be a shocking event for all governments. The era of government borrowing is in the process of coming to a close but it will not happen willingly. The politicians will resist until the creditors say "no". The sovereign debt crisis is in the early stages and will continue to move through Europe and towards Japan. We are seeing our interest rates go up as the FED is buying our bonds. Is this a good sign? Do we want to be next?
The only manning-up that needs to be done around here is some shocks to the regular folks. And I don't mean some students who have tuition increases like in the UK. Some deeply felt shortages or price shocks to goose the militia groups into some midnight runs.
Japan?? I thought we were going back to the stone age. What about all that ammo and 5lb buckets of grain we've been stockpiling?
you'll still need the bags of rice.
Zombie Banks - check
ZIRP - check
Corrupt Unaccountable
Political Class - check
Bureaucracy that strangles any
attempts at reform - check
Insane real estate market - triple check
We're different from Japan.... how? Oh, that's right, lady gaga.
lol
Tom Berenger says take the pain!
http://www.youtube.com/embed/-5NBja6NLTg
If the U.S. decline mirrors Japan's we should consider ourselves fortunate. I expect it to be a lot messier.
Precisely. The Japanese had their citizens to purchase all those bonds. In the US, people will be scrambling for cheap food and fuel.
man up or man overboard?
...Japan has tentacle porn, we have Goldman. Is that a big difference or a small one?
The Japanese have always taken more pain than necessary. They should have fired their wad all in the first two years. Qe and deficit spending in dribs and drabs won't cut it. Bernanke knows there will be a Qe3 this year. He's a lot smarter than some of you give him credit. P.s. I'm now long ewz at 74.83. All you armchair anarchists and investment poseurs publicize your bets if you really want to man up here
Man up and take the pain?
So let me get this straight: after getting bent over to bailout Wall Street and Washington for their profligate ways, Main Street is now supposed to "Man Up?".
No, we need to "String Up" a lot of bankers and politicians first.
Exactly. Now that the pinstripe suit brigade has been bailed out, let's kick grandma to the curb.
Man up, you sissies! Grandma can't get to the curb on her own!
Then add non extension of tax cuts and China scrambling to raise rates. The Bernank has no more ammo left.
His only job is to destroy. How can he ever possibly fail?
The only way to bring back sanity to this B.S is through bonds selling. Vigilantes need to grow some balls.
It won't be the vigilantes. It will be when the herd is spooked enough to stampede.
I've been wondering just how large of a force the vigilantes are, compared to the size of the EE. So they make out good on their paper? Big deal, Uncle Ben will just reload the chopper until such a time as the vigilante class has sold out of bonds completely. In the case that he can't contain it, I've no doubt the IMF will print enough SDRs (globos) to make everybody "good."
Once that happens, relative calm returns as the fictional market is played out in the MSM, restoring confidence to the big-lie narrative. (After all, they've kept the facade going for this long, surely they can keep it up for one more day.)
I just see vigilantes as a very marginal influence that can be absorbed in a single crisis. Or they are part of the EE as well, and it's all part of the script.
Your headline had me laughing hysterically and then I looked closer. I thought it said:
U.S. Must "Man Up and Take the Palin" or We'll Become Japan..I thought they'd rolled out Charlie Munger again, but this time he was threatening to sell us to the Japanese.
At which point I realized what the "Special" in "Special Drawing Rights" really stood for.
It's a "special currency" in the same sense as the "special lympics"; you have to applaud quietly and look impressed no matter how ridiculous it is.
Until us sheeple riot like citizens in other countries... I just don't see the politicians having the political will to make the tough choices.. Such is the nature of politicis. Things will get much worse before the sheeple begin to wake up. We Americans are generally fat, dumb, and happy.
JFC
doing the right thing is the last thing they will do
cheating is easier
We just had our President go out in public and act like Vince Young after he lost a football game. I see no likelihood of anyone in the US having a big enough pair of rocks to do as you suggest.
the envious people usually get their way. they don't want deleveraging. a sound financial policy is very far too unpopular.
http://covert2.wordpress.com
the envious people usually get their way. they don't want deleveraging. a sound financial policy is very far too unpopular.
It's the eventual crash that ends that sort drunk-driving binge...