• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Double Data Whammy For Japan As PMI Tumbles & Industrial Production Misses By Most Since Abenomics

Tyler Durden's picture


"It's always darkest before the dawn," we are sure will be the next idiotic (and wholly unsupported) bullshit line from various Japanese leaders about yet another round of disastrous Japanese data. Aside from June 2013, this is the biggest monthly drop in Industrial Production since the Tsunami - and biggest miss since Abenomics began. Good news right? More stimulus right? Not with inflation surging thanks to the collapsed currency. But wait, there's more 'great' news, Markit PMI just had its biggest 2-month drop in 20 months and is at its lowest in 6 months. For now, JPY is confused (and so is the Nikkei) but US futures aren't, they are rallying; because, well - why not, the casino is still open for now.


Industrial Production... spot the silver lining...


And Japan PMI...


Is it any wonder the Japanese are increasingly scrambling to prepare for the failure of Abenomics and are buying gold in size... that and the pending rise in Japan's consumption tax for gold from 5% to 8% (a retail consumption tax that Japan imposes unlike most countries)...


So to summrise in the last few weeks:


  • PMI (dropped again)
  • Industrial Production (huge)
  • Household Spending (huge)
  • GDP
  • Current Account Balance (huge)
  • All Industry Activity
  • Capital Spending
  • M3
  • Machine orders YoY (growth slowed)
  • Trade Balance (huge)
  • ECO Watchers Survey
  • Leading Index
  • Labor Cash Earnings (big)
  • Bank Lending
  • Exports

but...there was some positives...

  • Jobless rate (small beat)
  • Small Business Confidence (?)
  • Bankruptcies dropped
  • Imports (but that may not be a good thing)


  • CPI (hotter than expected) which means any hopes for moar stimulus has a major problem.
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Sun, 03/30/2014 - 20:50 | 4609027 JPM Hater001
JPM Hater001's picture

And everyone was all up in arms when Greece Defaulted.  That was nothing compare to what's next...


Sun, 03/30/2014 - 21:23 | 4609126 nevadan
nevadan's picture

It's always darkest just before....it goes completely black.

Sun, 03/30/2014 - 21:44 | 4609187 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Japan, land of the sinking sun.

Sun, 03/30/2014 - 22:01 | 4609234 Goldilocks
Goldilocks's picture

Sinead O'Connor - The House of the Rising Sun
http://www.youtube.com/watch?v=_bDW-YQZVLw (5:10)

Mon, 03/31/2014 - 02:00 | 4609704 mkkby
mkkby's picture

I wonder how "mr. nickels" Bass is doing these days.  Hunkering down after his too early bearish japan bets tanked, most likely. 

With the way govs are printing fiat and manipulating markets, the reset will come much later and swifter than anyone thinks.  Impossible to get the timing right unless you have inside info into the bankster cabal.

Mon, 03/31/2014 - 04:35 | 4609836 CHX
CHX's picture

... yet it will be glowing 4 a loooong time

Mon, 03/31/2014 - 02:36 | 4609742 SAT 800
SAT 800's picture

You beat me to it. I opened on to this articles comments to post just that. I am so annoyed by that foolish "old wives wisdom". It's so silly; half the time the moon is coming up or bright; before the dawn. Surely it is that it's darkest just before the last light goes out? And that is certainly a metaphore for the present situation.

Sun, 03/30/2014 - 20:52 | 4609035 Cognitive Dissonance
Cognitive Dissonance's picture

Looks like the party is at the JPY........er.......SPY.

Sun, 03/30/2014 - 20:59 | 4609054 disabledvet
disabledvet's picture

"Hi ho Silver"...if you can get it.

This US President is very fortunate to even have a Navy actually.
I hope the plans for proper compensation are in order.
They only have one order in that Branch and that is to attack.

Sun, 03/30/2014 - 20:59 | 4609048 NoDebt
NoDebt's picture

Chinese authorities grab $15 billion in assets and arrest 300 people in a "corruption" scandal:


Imagine that happening in the US.  OK, that's a little beyond the capacity of imagination, though well warranted, I'm sure.

15 BILLION.  That's like taking down Bill Gates and his ditzbag wife.  Or a dozen Bernie Madoffs.  Or a almost a hundred John Corzines.

I gotta admit, there's a part of me that like this.  Thought, I'm sure it's probably just a political move just to grab what's grabable from hangers-on of the previous Chinese ruling administraion.


Sun, 03/30/2014 - 20:58 | 4609053 Fidel Sarcastro
Fidel Sarcastro's picture

Ummm, bullish right?  

Sun, 03/30/2014 - 21:01 | 4609059 disabledvet
disabledvet's picture

If you make Tomohawk Cruise missiles it sure is.

Sun, 03/30/2014 - 21:07 | 4609076 TheRideNeverEnds
TheRideNeverEnds's picture

super bullish, thats why they opened up half a percent, more printing is in the cards, e-minis to the moon!!

Sun, 03/30/2014 - 21:00 | 4609058 armyguy25
armyguy25's picture

Yep, bullish.


It means the carry trade is safe for now.

Sun, 03/30/2014 - 21:03 | 4609068 disabledvet
disabledvet's picture

Well the "warhead" is more than 500 pounds so you'll probably need more than one guy.

Unless he is VERY strong of course.

Sun, 03/30/2014 - 21:04 | 4609069 armyguy25
armyguy25's picture

Although the Yen/USD aren't reacting, so I have to assume equities aren't up b/c of that. Prob just up because they're up.


Equities aren't directly affected by USD/JPY carry trade, only indirectly, as the money borrowed in JPY and transferred to USD has to go SOMEwhere. But if USD/JPY isn't affected by this news, I don't see it affecting the S&P 500

Sun, 03/30/2014 - 21:10 | 4609090 Tabarnaque
Tabarnaque's picture

QE Bitchez!

Sun, 03/30/2014 - 21:12 | 4609096 bam
bam's picture

i just thought this was hilarious




Sun, 03/30/2014 - 21:14 | 4609100 Herdee
Herdee's picture

Lots of staying power until the last Jap croaks.

Sun, 03/30/2014 - 21:19 | 4609115 sunny
sunny's picture

Nikkei up 0.77% ~1.5 hours after open.   How can bad news be good news when they are printing as fast as they can as it is?

Sun, 03/30/2014 - 21:20 | 4609118 Caviar Emptor
Caviar Emptor's picture

I dunno, I'm confused: Printing trillions and even quadrillions makes everyone rich, right? 

This New Normal is giving me a headache. 

Nothing makes sense anymore

Gosh if even the financial gurus and geniuses can't engineer a new prosperity, then how are we ever gonna get this fixed? 

Sun, 03/30/2014 - 23:40 | 4609479 disabledvet
disabledvet's picture

"it's great until it isn't. and when it isn't it really is the end."

Sun, 03/30/2014 - 21:26 | 4609135 ms8172
ms8172's picture

Someone help me out here.... why is the Nikkei up?

Sun, 03/30/2014 - 21:39 | 4609168 Ness.
Ness.'s picture

Because it shouldn't be (if that makes any sense).  It's that bad out there I'm afraid.  

Sun, 03/30/2014 - 21:42 | 4609178 armyguy25
armyguy25's picture

The only thing that matters is CPI, even though it's given second billing status in this article.


CPI is up, which means that inflation might be coming, which means that QE will have to stop, or possibly even rates raised (depending on how much inflation hits in the future)

Upon further thinking, this will actually be bearish for US equities. It means the carry trade is actually NOT safe. There are two risks for the carry trade: equities risk and currency risk. If USD/JPY is going down, carry traders are geting hurt on currency risk.

Which is why USD/JPY has moved lockstep with the S&P the past year or two.

Sun, 03/30/2014 - 21:46 | 4609191 Oldwood
Oldwood's picture

Everything must go up or it all goes down. There is no middle ground now. The only reason to stay in a corrupt game is to get rich. The days of "investing" are over. They will be trying to blow hot air into this bubble with their last dying breath.

Sun, 03/30/2014 - 23:42 | 4609483 disabledvet
disabledvet's picture

Venezuela, Argentina, Zimbabwe...those equity markets have been great.

Sun, 03/30/2014 - 21:34 | 4609154 bdub2
bdub2's picture

Numbers and supposed "data" are all well and good. However, to steward my fiat, I trust in the Two primary Economic elements chosen most by our superiors: Hope and Print.

I ask you this: if one hopes in one hand and prints in the other---which fills up faster?

If all-knowing Yellen prints in the woods, can one smell it? When the print hits the fan, will it truly be over this time, or will they Hope our way to moar printed prosperity?

from Bloomberg

“The hope is still there,” Grace Tam, a Hong Kong-based global market strategist at JPMorgan Asset, said by phone on March 26. “It’s just hope, rather than us having any evidence they’re going to enact reforms. If they can’t, people will lose confidence in Japan, so they better do something.”

Sun, 03/30/2014 - 21:36 | 4609163 undertowed
undertowed's picture

Jap economy gonna get more QE! Abe will make the stock market fly when he prints the next trillion or two.

Sun, 03/30/2014 - 21:43 | 4609185 armyguy25
armyguy25's picture

higher CPI print means LESS likely for more QE, not more.

Perhaps even rate rises sooner rather then later.

Mon, 03/31/2014 - 01:09 | 4609647 NDXTrader
NDXTrader's picture

@armyguy - Yes, that would make sense in a rational world. We jumped that shark a long time ago

Sun, 03/30/2014 - 21:41 | 4609174 FieldingMellish
FieldingMellish's picture

This will all be taken care of once London opens. PMs will start to get sold until the traditional 8:30AM EST smackdown and stawks will be ramped on razor thin volumes through microsecond quote stuffing. All is well.

Mon, 03/31/2014 - 01:10 | 4609648 NDXTrader
NDXTrader's picture

And there's your answer. Yep, that will happen

Sun, 03/30/2014 - 21:42 | 4609181 ms8172
ms8172's picture

Why don't they just purchase products directly from their companies and put it on their balance sheet... at this point who gives a fuck right?  After that, then print free money off and put it in the mail to everyone.... yeah.. everything would be great then.  The economy we were all looking for.

Sun, 03/30/2014 - 21:54 | 4609215 Oldwood
Oldwood's picture

Its not easy to create a fake vibrant economy from a dead one. We need to be more open minded and imaginative. Frankenstein had an easier time of it.

Mon, 03/31/2014 - 02:04 | 4609709 mkkby
mkkby's picture

Don't say that.  Look at all that land.  We haven't even started building vacant cities.  Dollar reserve status must be defended at all costs.

Sun, 03/30/2014 - 22:24 | 4609296 Goldilocks
Goldilocks's picture

Parachute Club - Rise up
http://www.youtube.com/watch?v=JcC-SbcihKI (3:29)

Sun, 03/30/2014 - 22:34 | 4609328 Yenbot
Yenbot's picture

The rumors of my demise were quite exaggerated...

Sun, 03/30/2014 - 22:58 | 4609387 AdvancingTime
AdvancingTime's picture

Japan is the most indebted developed country in the world and its future prospects are dim and getting worse. If inflation begins to take root it will place upward pressure on Japanese bond yields and raise the cost of government to service its massive debt. As the yen drops even higher stock markets in Japan will fail to protect the wealth of those invested within its borders.

With the BOJ  set to absorb half of the government bonds planned for sale this fiscal year, domestic investors have already started venturing overseas for higher yielding assets. If this turns in to a tsunami of  money fleeing Japan it will constitute the end of the line for those holding both JGBs and the yen. More on this subject below,


Sun, 03/30/2014 - 22:59 | 4609391 Boomberg
Boomberg's picture

Weather must be pretty bad in Japan.

Sun, 03/30/2014 - 23:28 | 4609453 Nobody For President
Sun, 03/30/2014 - 23:25 | 4609428 Spungo
Spungo's picture

Economy destroyed. Mission accomplished. Japan's stock market will probably shoot to the moon as people run from bonds. Bonds with negative real interest rates are generally bad investments to protect from inflation. Gold and stocks do a lot better. It doesn't matter what the currency is worth, at least you can say you own 0.001% of Toyota or something.

Sun, 03/30/2014 - 23:25 | 4609448 yogibear
yogibear's picture

A huge failed experiment  for Ben Bernan, QEen Yellen, William Dudley, Charles Evans and the rest of the big money printers at teh Federal Reserve,

The US Fed thought the answer to Japan's ills was to print like there was no tomorrow.

Mon, 03/31/2014 - 02:42 | 4609748 SAT 800
SAT 800's picture

Imagine how surprised they are when they find out there is a "tomorrow". "No one could have foreseen this".

Sun, 03/30/2014 - 23:55 | 4609509 Make_Mine_A_Double
Make_Mine_A_Double's picture

I'm beginning to look at Japan as a 'bad bank' for the Fed.

Mon, 03/31/2014 - 04:32 | 4609834 CHX
CHX's picture

yup, a 2B2F country

Mon, 03/31/2014 - 01:12 | 4609651 NDXTrader
NDXTrader's picture

I really hope everyone saw 60 minutes tonight. I was stunned that they would let someone say the market is rigged on corporate television

Mon, 03/31/2014 - 02:26 | 4609734 TheRideNeverEnds
TheRideNeverEnds's picture

I wanted to hear more; unfortunately he died in a tragic nail-gun accident later that night.  

Mon, 03/31/2014 - 10:50 | 4610541 The Blank Stare
The Blank Stare's picture

I just hope they don't cut off my Japanese porn.

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