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Forget China; Japan Is 'Taking Over' The World Again

Tyler Durden's picture


The Japanese Yen has been one of the strongest currencies among the developed nations of the world since the end of LTRO (up 6%). This strength (repatriation flows and or carry unwind?) combined with a dismal domestic economic growth environment appears to have pushed Japanese firms to spend spend spend for growth. The latest and greatest Softbank/Sprint deal will shift this year's Japanese corporate acquisition of foreign companies to near-record levels. As Bloomberg Briefs notes, this will be the country's largest overseas acquisition on record - exceeding Japan Tobacco's $19bn acquisition of the UK's Gallaher Group in 2007. However, this growth-buying-spree does not come cheap as ratings are under pressure and while LBO-style financing might make the deal 'cheap' at first, at some point the cycle will re-emerge; but for now - it appears the BoJ (who we are sure are watching intently) should maybe leave intervention off the table until Japan owns it all again and becomes even more too-bigger-to-fail.



Chart: Bloomberg Brief

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Mon, 10/15/2012 - 09:05 | 2889821 SheepRevolution
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If "taking over" means swimming around in debt, then yes...

Mon, 10/15/2012 - 09:12 | 2889837 GetZeeGold
GetZeeGold's picture




Don't think for one second we won't sick Godzilla on their asses.

Mon, 10/15/2012 - 09:25 | 2889868 Oh regional Indian
Oh regional Indian's picture

Softbank/Sprint is a big "trend" tell. 

Japan is re-cycling carry-trade surpluses into deals. Current Yen strength and future Yen weakness.... perfect.

Unless the dollar sinks, but after all these years.... still afloat on a sea of petroleum.


Mon, 10/15/2012 - 10:44 | 2890411 maxamus
maxamus's picture

Yeah, except, they were able to fend off Godzilla every single time.

Mon, 10/15/2012 - 09:13 | 2889840 MillionDollarBonus_
MillionDollarBonus_'s picture

This is largely a result of the vigilant monetary policy of the JCB. Accommodative monetary policy creates a stable and predictable interest environment in which businesses can thrive. It also allows companies to export goods at competitive foreign exhange rates. Economics is a science and the science of economics needs to be left to qualified professionals at central banks, NOT the general public.

Mon, 10/15/2012 - 09:21 | 2889856 Azannoth
Azannoth's picture

Do you happen to be a Paid Shill by any chance? No ?

Mon, 10/15/2012 - 09:54 | 2890068 CPL
CPL's picture

He's a pro troll.  Re-read him in onion format.  Occassionally he's serious and he'll mention that.  Most accept the fact he can post without /sarc/ tags on.


He's got a knack for writing MSM like a professional.

Mon, 10/15/2012 - 09:36 | 2889892 LongSoupLine
LongSoupLine's picture

not bad for a Monday MDB...still not your best satire however.

Mon, 10/15/2012 - 09:27 | 2889871 insanelysane
insanelysane's picture

Japan went from lost decades to owning the world???  Then why wouldn't we solve our problems like they did?

Mon, 10/15/2012 - 09:31 | 2889883 Oh regional Indian
Oh regional Indian's picture

Because the appearence of solving a problem is not the same as actually solving it?

Japanese people are in much worse shape today compared to 1990.

Japan (Banking/Govt./JapPTB, basically the 1% or even the .01 percenters) are doing well. 


Mon, 10/15/2012 - 10:00 | 2890252 suteibu
suteibu's picture

Actually, Japan went from owning the world to lost decades to owning the world again.  One should assume that the next step is more lost decades and for all the same reasons it happened the first time.

Mon, 10/15/2012 - 09:08 | 2889827 LongSoupLine
LongSoupLine's picture



two words...Kyle Bass.

one analogy...don't get to close to someone who's drowning, they will pull you under too.



Mon, 10/15/2012 - 09:10 | 2889831 toomanyfakecons...
toomanyfakeconservatives's picture

Wasn't Japan's finance minister just suicided or murdered?

Mon, 10/15/2012 - 09:45 | 2889916 Isotope
Isotope's picture

Looks like it's time to find my DVD of "Rising Sun" and watch it again. Loved that movie. The book was even better.

Mon, 10/15/2012 - 09:49 | 2889957 BigInJapan
BigInJapan's picture

Former ambassador to China

Mon, 10/15/2012 - 10:09 | 2890282 suteibu
suteibu's picture

In the ultimate wisdom of Japan's political class, they named Jun Azumi as Financial Minister.  He had literally no experience in matters financial either in his private life or during his political career.  In the most recent cabinet reshuffle, Azumi (who, not ironically, was criticized for being inexperienced) was replaced by Koriki Jojima who has a degree in agriculture and whose career is notable for being the head of a large food workers' union in Japan.


Mon, 10/15/2012 - 11:07 | 2890501 Ampontan
Ampontan's picture

Azumi was a TV host. His predecessor was Noda, who also knew nothing, and his predecessor was Kan Naoto, who knew less than a parrot.

The political class -- or really, the DPJ -- is not naming Finance Ministers, they are naming Finance Ministry press spokesmen. The Finance Ministry makes all the decisions while convincing the politicians that they were the deciderers. The DPJ government promised to stop all that, but made it worse.

In Japan, the real policymakers are in the bureaucracy, and the politicians are the lobbyists (sometimes for a particular ministry).

There have been exceptions; Takenaka Heizo (Koizumi Cabinets) fought a guerilla war for five years to shut them out, but none since Fukuda.

Mon, 10/15/2012 - 11:09 | 2890478 Ampontan
Ampontan's picture

Financial Services minister, which oversees the banking, etc., industry. Different from Finance.

The story was that philandering was about to be exposed. If "suicided or murdered", it would be puzzling. He was over 70, unknown, and from a splinter group of a political party still hanging on in the coalition.

Mon, 10/15/2012 - 09:12 | 2889836 Sudden Debt
Sudden Debt's picture

America could buy at least 4 large companies like that EVERY MONTH just by printing fiat!


Mon, 10/15/2012 - 09:31 | 2889884 Jason T
Jason T's picture

Spain's Ibradrola bought NYSEG in 2008.. broke, bankrupt Spain.  Part of my utility bill goes toward the interest on that loan I am sure.. to some bankster in Euroland who lent the money that was created out of thin air and charged interest on.


So instead of letting us Americans buy those cheap China made solar panels and tell the banksters to take a hike as we become self sufficient, we decide to put a huge tarriff on them instead.

Mon, 10/15/2012 - 09:13 | 2889839 fonzannoon
fonzannoon's picture

I wonder if Kyle Bass is hangin in there like with his Japan trade like I did with TBT from 40 to 30 (2 years ago) before I cried Uncle...I wonder if he is constantly reminding everyone of fundamentals with that self assured manner that I had, as I lost my ass...

Mon, 10/15/2012 - 09:33 | 2889886 ShorTed
ShorTed's picture

TBT @ 40? yeah i remember averaging some in there...just 5 (or more)years early on that trade.

Mon, 10/15/2012 - 09:14 | 2889842 LawsofPhysics
LawsofPhysics's picture

That's because "debt is money".  No one knows how to accumulate debt like Japan. - "winning"

(For the less asute, or 95% of you young americans who came out of the public school system, this is sarcasm)

Mon, 10/15/2012 - 10:11 | 2890299 Vince Clortho
Vince Clortho's picture

To my knowledge, finance and economics are not taught in the Public school system until students reach college level.  At that point they begin the indoctrination with the Keynesian-Voodoo theory of economics.

Mon, 10/15/2012 - 10:23 | 2890330 LawsofPhysics
LawsofPhysics's picture

they don't have to be, turn off your television dude, Big Bird is a fucking Keynesian.

Mon, 10/15/2012 - 09:28 | 2889875 Stuck on Zero
Stuck on Zero's picture

Japan is preparing for the retirement of its citizens by saving and making foreign acquisitions.  The United States is preparing for retirement by going into debt.  Who is smarter?


Mon, 10/15/2012 - 09:35 | 2889890 Dr. Engali
Dr. Engali's picture

Have you seen the Japanese debt level? Their debt level is at at 220% of GDP.

Mon, 10/15/2012 - 10:52 | 2890444 Stuck on Zero
Stuck on Zero's picture

That's an internal debt level.  They hold huge foreign assets.  The U.S. has a huge external debt position.  In addition, add in unfunded liabilities to the U.S. debt and we're as bad off as Japan for internal debt.


Mon, 10/15/2012 - 09:46 | 2889910 BigInJapan
BigInJapan's picture

Sure. . . Softbank took over the Japanese Vodafone unit and crushed its own share price - even with a multi-year Iphone exclusive. . . Skillz

Best short the bejeezus out of it and watch it get dumped in a year or two. The Japanese owned Rockefeller Center too, for five minutes

Mon, 10/15/2012 - 09:44 | 2889915 dbomb12
dbomb12's picture

Million dollar bonus alias Paul Krugman

Mon, 10/15/2012 - 10:00 | 2890250 adr
adr's picture

Japanese companies almost have no choice. With the yen so strong they can barely pull a profit off selling domestically produced product to the USA. Using the strong currency to buy profit from other corporations works well for a time.

While the Japanese are loving being able to buy almost anything in America for a huge discount, they know the situation at home is precarious. One great thing is being able to get a 1% loan from a Japanese bank to buy real estate in the US.

A lot of the Japanese I know wish we made right hand drive cars in America. It is a lot cheaper to buy an American car and ship it over, than to buy in Japan. I couldn't believe how many classic American cars I saw in Japan the last time I was there. I was told that classic cars are exempt from a lot of regulations, just like in the US, and they can be bought for next to nothing.

Mon, 10/15/2012 - 12:25 | 2890776 AnAnonymous
AnAnonymous's picture

The great uniformized world as wished by 'americans'.

Mon, 10/15/2012 - 13:11 | 2890937 akak
akak's picture

The great uniformly bigoted, kneejerk anti-American 'US Citizenism' fantasy world as wished by AnusAnnoyingUs.

Mon, 10/15/2012 - 10:26 | 2890339 prains
prains's picture

here come the purple descente ski suits again, fuck it was awful the first time

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