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Goodbye Japan, Hello Korea

Tyler Durden's picture




 

As the government and Bank of Japan constantly survey the marketplace for speculation while intervening en masse with ever-decreasing levels of effectiveness, we thought the following charts would highlight the impact of the relative strength of the JPY. Of course, in the past, at least the trade surplus (thanks to these legacy companies) used to provide incremental capital into the country but now even that is gone. As Credit Suisse notes, "the TWI of the JPY has appreciated by more than 40% post crisis – even more than the CHF! But it is the relative strength versus the KRW that is really hurting Japanese firms. The Won plummeted sharply post crisis and has recovered nowhere near pre-crisis levels. Some of this shift in relative competitiveness may be reflected in the market cap of Samsung versus that of major Japanese tech firms. Samsung is more than three times the size of Japan’s top technology firms."

Since the crisis, Samsung has overwhelmed the largest 5 Japanese Tech firms...

 

 

It was not always this way...

 

 

And in context - here is AAPL...

 

Why is this a concern? Because whereas in the past Japan's economy at least had a source of endogenous capital courtesy of its trade surplus to offset all the other drains of domestic capital, this is no longer the case as we showed recently.

This means that the government is now effectively the only source of capital to offset all other Current Account outflows. This also means that Japan will be forced to monetize more and more, issue more and more debt, even as its population gets older and older and is forced to withdraw ever more savings, shrink the financial system, and sell ever more securities, thus finally accelerating the collapse of the Japanese monetary neutron star's 30+ year implosion into what, inevitably, becomes a black hole.

 

 

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Tue, 11/13/2012 - 14:51 | 2976908 Duke of Con Dao
Tue, 11/13/2012 - 14:55 | 2976924 francis_sawyer
francis_sawyer's picture

Oppa Gangnam style...

~~~

http://www.youtube.com/watch?v=mYPvAMrMzwI

Tue, 11/13/2012 - 14:56 | 2976929 molecool
molecool's picture

That was obligatory - LOL

Tue, 11/13/2012 - 15:36 | 2977087 BlueCollaredOne
BlueCollaredOne's picture

I will never understand asians...

Tue, 11/13/2012 - 15:44 | 2977119 akak
akak's picture

You mean Orientals, right?

Tue, 11/13/2012 - 15:47 | 2977137 francis_sawyer
francis_sawyer's picture

I thought I was the token resident racist/anti-semite on ZH... Actually ~ I'm just filling in until Trav returns...

Tue, 11/13/2012 - 16:15 | 2977261 akak
akak's picture

What is possibly racist about the word "Oriental"?  To idiotically use "Asian" as a substitute is to totally ignore the many Asian nationalities which are NOT Oriental, such as Russians, Arabs and Indians, not to mention just once again highlighting the gross geographical ignorance of most Americans.

I can only laugh whenever I hear some ignorant fool use the word "Asian" to mean "Oriental" --- which most Orientals I know laugh at as well.

Tue, 11/13/2012 - 16:26 | 2977314 Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture

Lighten up, Francis.

Tue, 11/13/2012 - 16:47 | 2977390 Spastica Rex
Spastica Rex's picture

All animals aren't orangutans.

Therefore, never call an orangutan an animal.

QED

Tue, 11/13/2012 - 16:51 | 2977409 francis_sawyer
francis_sawyer's picture

the /sarc should have been implied...

Tue, 11/13/2012 - 16:51 | 2977411 francis_sawyer
francis_sawyer's picture

the /sarc should have been implied...

Tue, 11/13/2012 - 16:59 | 2977454 Spastica Rex
Spastica Rex's picture

echo... echo... echo...

Tue, 11/13/2012 - 17:00 | 2977457 Spastica Rex
Spastica Rex's picture

echo... echo.. echo...

Tue, 11/13/2012 - 18:00 | 2977708 akak
akak's picture

 

All animals aren't orangutans.

Therefore, never call an orangutan an animal.

Actually, Spastica, the moral here is to never call an orangutan an animal while implying that orangutans are the ONLY animal.

Tue, 11/13/2012 - 18:36 | 2977803 Spastica Rex
Spastica Rex's picture

Why so serious?

Tue, 11/13/2012 - 22:01 | 2978419 juliawong
juliawong's picture

I prefer to be called "North East Asian", which distinguish ourselves from "South Asians" = Indians and "South East Asians" = Indoneisan, Fillipinos (which Hong Kongers hire as maids and domestic servants).

Tue, 11/13/2012 - 14:58 | 2976948 HD
HD's picture

Oxycontin is a hell of a drug...

Tue, 11/13/2012 - 15:00 | 2976960 slaughterer
slaughterer's picture

When Americans look at the dismal and frightening development of the Japanese economy, they need to realize that they are staring at their own future.

 

Wed, 11/14/2012 - 01:01 | 2978863 patb
patb's picture

We bankrupt our zombie institutions,  except for Chrysler, Citibank, Goldman, BAC, JPM, MS,,,,

 

Forget I said anything

Tue, 11/13/2012 - 14:55 | 2976909 molecool
molecool's picture

I visited Korea three times in the past two years and the signs of expansion and progress are everywhere. What's more important however is that the Koreans are long term planners. They know where they want to be five, ten, twenty, fifty years from now. Everyone is working their asses off over there - I have rarely seen harder working people in my life.

Plus Korea is fun! You haven't partied until you spend a few nights with some Korean hosts - enough said ;-) Seoul is off the hook and I also traveled to the country side. Some of their mountain ranges are very reminiscent of Yosemite, believe it or not - great rock formations. The cities are super clean - I didn't see any trash on the roads or in the cities.

Downside: Very hot summers and brutally cold winters. The wind in Seoul literally blew through me - not for the faint hearted.

Tue, 11/13/2012 - 14:58 | 2976944 ParkAveFlasher
ParkAveFlasher's picture

Kimchee FTW, bitchez!

Tue, 11/13/2012 - 16:04 | 2977210 Troll Magnet
Troll Magnet's picture

Countries like Korea and Japan are great because they're very homogeneous.  People share common values, beliefs, code of ethics, honor, etc.  Therefore, very low crimes and general sense of harmony.  But we're told that multiculturalism is what's up.  The decline of western civilization, bitchez!  

Tue, 11/13/2012 - 15:15 | 2977003 Spitzer
Spitzer's picture

Good thing the US military interviened in South Korea then eh ?

Or do we all just want to forget all the wars the US won ?

 

Tue, 11/13/2012 - 15:19 | 2977021 Spitzer
Spitzer's picture

Not that cold of winters man.

 

Tue, 11/13/2012 - 15:35 | 2977075 HD
HD's picture

I didn't care for Korea - I couldn't find reruns of M*A*S*H on any channel...

Tue, 11/13/2012 - 16:49 | 2977395 TumblingDice
TumblingDice's picture

Korea has definitely got their shit together. Going back to the states after living there for a couple of years is like going back in time. In America people are generally less polite, the technology is behind (can't use phone or wireless in subways, theatres are low quality, internet is slower, etc etc) the cuisine is not as healthy and the country is generally dirtier. 

Tue, 11/13/2012 - 22:04 | 2978430 juliawong
juliawong's picture

Amen. You can also substitute Korea with HK and US with UK and have the same effect.

Tue, 11/13/2012 - 22:28 | 2978506 WeeWilly
WeeWilly's picture

Been there 4 times in 5 years (visiting family, my wife is Korean). A have described it the same way, back to the 60's. TV is full of variety type shows. Once every show, a man dresses like a woman and they laugh their asses off. It is a dirty place, though. Lots of pollution comes over from coal plants in China and few environmental limitations. The longevity there is close to what it is here despite the healthier diet. Lots of smokers, stressful living in crowded conditions (Seoul area) and poor air quality. People love family and are very hard working.

Wed, 11/14/2012 - 01:04 | 2978869 patb
patb's picture

They said that about Japan from 1965 to 1990.  Japan hosted the Olympics in 1964 and 1968 (Summer, Winter).

 

Japan was building the finest Bullet train system in the world in the 1960s.  

 

Japan was building World Class technology in the 70's and 80s.

 

Same thing as Korea, soon enough.

Wed, 11/14/2012 - 01:59 | 2978936 draghithebearslayer
draghithebearslayer's picture

yeah, sure, koreans got their shit together. so much so that Korea has the highest suicide rate in the world, along with the lowest birth rate in the world. look from outside looks like they're working wonders; when you look at it from inside, korea is one of the most fucked up hell hole on this planet that every one of its sane inhabitants want to get the fuck out from.

 

Tue, 11/13/2012 - 14:53 | 2976918 AldoHux_IV
AldoHux_IV's picture

Crony capitalism in cycles thanks to currency manipulation and free trade agreements

Tue, 11/13/2012 - 14:55 | 2976925 molecool
molecool's picture

Whatever works :-)

Tue, 11/13/2012 - 14:55 | 2976927 falak pema
falak pema's picture

Merkel encourages Germany to increase its exchange with Korea and wants EUrozone to open up the market to korean model; France wants the Koreans to export less and import more on a BILATERAL basis with each European nation.

Absurd logic, Korea is now producing for Europe in East Europe (Slovak, Czecho, Poland) and France has to adapt its competitivity. Korea is now the lead dragon in Eurozone.

Tue, 11/13/2012 - 14:58 | 2976942 buzzsaw99
buzzsaw99's picture

Samsung is the shiznit.

Tue, 11/13/2012 - 15:02 | 2976964 slaughterer
slaughterer's picture

Samsung will buy Japan in 2 or 3 three years, and make every Japanese citizen a debt slave to Samsung.  

Tue, 11/13/2012 - 15:33 | 2977070 molecool
molecool's picture

I guess payback is a bitch...

Wed, 11/14/2012 - 01:11 | 2978879 patb
patb's picture

China and Korea will seek to make Japan their bitch.

 

Their aging, radioactive bitch.

Tue, 11/13/2012 - 15:10 | 2976985 centerline
centerline's picture

Decent tech products for the most part.  They really have done a great job all around.  Will be interesting to see how this play out, especially in the mobile device arena.

Tue, 11/13/2012 - 15:17 | 2977009 buzzsaw99
buzzsaw99's picture

The television picture can't be beat, neither can the computer monitors. If there is one deficiency they have it is the sound (the same problem they all have/had) but for that there are external speakers/amplifiers. There was a stretch there when I felt like a crAAPL junkie. I still don't have it out of my system entirely.

Tue, 11/13/2012 - 15:26 | 2977040 centerline
centerline's picture

I've got a handful of Samsung items and haven't been disappointed yet.  Especially at the price points.  One of them is an older DLP TV that has worked flawlessly since I bought it.  Just changed the light bulb for the first time this year.  In a world where these items seem to become more and more disposable, this says alot.  Either Samsung is building decent products or needs some serious improvement in planned obsolescence - lol.

Tue, 11/13/2012 - 15:40 | 2977083 buzzsaw99
buzzsaw99's picture

At least the capacitors don't pop within the first year like the cheapies do. There is a ton of room to innovate but I don't feel like they are moving very fast in that arena. The dvd players are wireless and have aps for netflix et al but still not functional for internet surfing and haven't really changed in three years. The audio jacks on the "smart" tvs are not remotely controlled, they aren't wifi capable either, but they are energy efficient. A tiny phone is 10X more advanced than a 73" television which I find sad. If they ever get everything working interchangeably they will sell a lot more product imo.

Tue, 11/13/2012 - 15:36 | 2977085 MachoMan
MachoMan's picture

For all of the price points and picture quality, I'll beg to differ and put panny plasmas at the top of the heap.  Samsung makes great products and definitely a +1 on computer monitors, but I'll put a panny plasma against a sammie plasma any day of the week and give you 2:1 on price point.

Tue, 11/13/2012 - 15:43 | 2977123 buzzsaw99
buzzsaw99's picture

Can't beat a plasma for watching sports etc.

Tue, 11/13/2012 - 15:58 | 2977173 Yen Cross
Yen Cross's picture

 I like Samsung, pretty much everything...  Samsung stock is expensive to... Samsung Electronics Co Ltd (005930.KS) Quote| Reuters.com

 

 

 Ref; 1 US dollar = 1089.8400 South Korean won
Tue, 11/13/2012 - 14:59 | 2976953 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Japan is fucked.

Tue, 11/13/2012 - 15:01 | 2976962 AG BCN
AG BCN's picture

It still scores high on the cute chickometer. 

Tue, 11/13/2012 - 15:17 | 2977011 Spitzer
Spitzer's picture

South Korea does too. A study indicated that S Korean women are the tightest in the world.

Tue, 11/13/2012 - 15:21 | 2977026 slaughterer
slaughterer's picture

Client 9 should know.

Tue, 11/13/2012 - 15:31 | 2977056 silver500
silver500's picture

Long Japan exporters and short the Yen

Tue, 11/13/2012 - 15:55 | 2977169 MachoMan
MachoMan's picture

Yeah, but do they have tubgirl?

Tue, 11/13/2012 - 15:13 | 2976991 Dr. Engali
Dr. Engali's picture

The world is fucked.

Tue, 11/13/2012 - 15:15 | 2977005 Fuh Querada
Fuh Querada's picture

What's that in Japanese (or Korean for that matter)?

Tue, 11/13/2012 - 15:17 | 2977013 Fuh Querada
Fuh Querada's picture

Anata-wa fukkimasu?

Wed, 11/14/2012 - 19:15 | 2981951 kalasend
kalasend's picture

No, most Japanese are fucked. A few of them benefitted from 30+ yrs of corporate zombie life support. Shits don't happen for no reason, just remember.

Tue, 11/13/2012 - 15:13 | 2976995 Pancho Villa
Pancho Villa's picture

This means that the government is now effectively the only source of capital to offset all other Current Account outflows.

And how long until the Japanese government starts eyeing its massive US Treasury holdings as a source of funds?

Tue, 11/13/2012 - 15:21 | 2977028 NotApplicable
NotApplicable's picture

Likely the day after David Rockefeller passes.

Wed, 11/14/2012 - 01:12 | 2978883 patb
patb's picture

The day after they realize Hank Paulsens Bazooka is for show.

Tue, 11/13/2012 - 15:14 | 2976998 Jason T
Jason T's picture

HyperinFRAYSHUN.

Tue, 11/13/2012 - 15:15 | 2977001 orangegeek
orangegeek's picture

Nikkei over the last 10 years has been a dog.

 

Kospi has been on a steady climb.

 

 

Tue, 11/13/2012 - 15:22 | 2977030 TruthInSunshine
TruthInSunshine's picture

10 years?

More like 23 years.

Nikkei since 1989 bitchez

Tue, 11/13/2012 - 15:52 | 2977160 francis_sawyer
francis_sawyer's picture

The Nikkei tracks well with the US efforts to bring "freedom" to the Middle East...

Tue, 11/13/2012 - 16:15 | 2977249 Yen Cross
Yen Cross's picture

 South Korea isn't built on one "gigantic fault line", and it's closer to S/E Asia than Japan. South Koreans aren't " homogeneous" butt darts either.

  The South Koreans have a young "worker demographic", and are generally nice people to work with.

When the ( ¥ ) blows it's cork, Japan is going to be screwed, "every which way but loose"! Japan is the second largest holder of U.S. debt, behind China...                                                   Every Which Way But Loose (Eddie Rabbit) - YouTube

 

Tue, 11/13/2012 - 16:30 | 2977332 nodhannum
nodhannum's picture

Hey guys, we are currently on the road to copying the koreans in our political and economic system so don't fret one bit!  Oh wait, I think our "Dear Leader" has gotten it wrong and is copying the northern end of the peninsula.  Oh shit!

Tue, 11/13/2012 - 17:58 | 2977698 Dre4dwolf
Dre4dwolf's picture

In regards to apple, the bigger they are.... the...harder they?

Wed, 11/14/2012 - 00:04 | 2978756 Ctrl_P
Ctrl_P's picture

  Hit you on the head.

Wed, 11/14/2012 - 00:06 | 2978761 Ctrl_P
Ctrl_P's picture

Are to miss with an arrow?

Tue, 11/13/2012 - 21:08 | 2978264 TrulyBelieving
TrulyBelieving's picture

Is there any correlation between debt and poverty?  Jus' askin.

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