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Bank Of Japan Prepares To Blame El Nino For Spending Collapse

Tyler Durden's picture


Just in case you were not convinced what a fragile fallacious lie the entire world's status quo has become, the Bank of Japan just provided one more straw on the camel's back of faith-based investing. As Bloomberg reports, BoJ officials are concerned that cooler-than-normal weather triggered by El Nino this summer will curb spending and weigh on an economic rebound. The Japan Meteorological Agency this week forecast a 70% chance El Nino will occur, the highest since its last occurrence in 2009, bringing lower temperatures that could continue through autumn - and, according to Dai-Ichi, could lower growth by as much as 0.9 percentage points. "We can't rule out the potential that the El Nino this summer causes unexpected damage to Japan’s economy," Nagahama said... the first pre-blamed weather forecast from a central bank we are aware of. Of course, given the dismal retail sales data this morning, we suspect a cooler-than-expected summer will be the scapegoat for a lack of economic escape velocity in the US also.


As we noted, just this week...

Any day, week, month, quarter, year now... that J-Curve 'recovery' will come bounding over the horizon and save the Japanese economy from its inevitable death spiral... for now, presented with little comment aside for historical confirmation (as even Goldman Sachs has now given up on hope of a bounce), Japan's largest (seasonally-adjusted) Balance of Payment Trade Deficit ever...


Not much sign of recovery there - weather or no weather...

And so - just in case the faith in Abenomics is lost this summer - the BoJ comes out with pre-blamed weather to lay the foundation for new excuses... (as Bloomberg reports)

Bank of Japan officials are concerned that cooler-than-normal weather triggered by El Nino this summer will curb spending and weigh on an economic rebound after a sales-tax increase, according to people familiar with the matter.


The officials are watching out for potential weakening in consumer spending and sentiment that could add to risks facing the economy from weak exports and developments in Ukraine, according to the people, who asked not to be named because the discussions were private. With an export recovery that could be gradual, the effects of El Nino require close monitoring, the people said.


The Japan Meteorological Agency this week forecast a 70 percent chance El Nino will occur, the highest since its last occurrence in 2009, bringing lower temperatures that could continue through autumn. Dai-ichi Life Research Institute economist Toshihiro Nagahama sees a risk that cooler weather could reduce growth by as much as 0.9 percentage point in the third quarter.


El Nino refers to a periodic warming cycle in the central and eastern tropical Pacific Ocean which can lead to major weather pattern shifts, including cooler-than-normal sea surface temperatures in the western Pacific. This can cause lower temperatures, higher rainfall, and less sunlight in Japan when it occurs during the northern hemisphere summer, according to Japan’s weather agency.


“We can’t rule out the potential that the El Nino this summer causes unexpected damage to Japan’s economy,” Nagahama said. “This could affect the decision to raise the sales tax from October next year as the growth rate in July-September is critical for that judgment.”

As Scogen notes, perhaps front-running this pre-blame...

Our analysis finds that real household disposable income is weaker now than in 1997, and this may dampen consumer sentiment, leading to increased concern about the success of Abenomics.


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Tue, 05/13/2014 - 14:28 | 4755833 nope-1004
nope-1004's picture

Milli Vanilli economics.  Eat your heart out Krugman.


Tue, 05/13/2014 - 14:30 | 4755844 CrashisOptimistic
CrashisOptimistic's picture

Good call, nope.

What a pathetic time we live in.

Tue, 05/13/2014 - 14:40 | 4755894 TeamDepends
TeamDepends's picture

"El Nino" is Japanese for "radiation big wave".

Tue, 05/13/2014 - 14:41 | 4755897 john39
john39's picture

global warming strikes again.

Tue, 05/13/2014 - 14:53 | 4755943 ZerOhead
ZerOhead's picture

Speaking of Global Warming...

Lots of catastrophic predictions these days as we are informed by the MSM again and again that the antarctic continues to melt threatening devastating sea level rise across the planet...

Meanwhile back in the real world antarctic sea ice reaches a wait-for-it ...


Tue, 05/13/2014 - 14:54 | 4755953 max2205
max2205's picture

Hey its Tuesday,  why am I losing my ass

Tue, 05/13/2014 - 15:09 | 4756001 superflex
superflex's picture


Tue, 05/13/2014 - 15:29 | 4756070 yogibear
yogibear's picture

Bondzilla seems to be dead. The central banksters clubbed it to death. 

Tue, 05/13/2014 - 15:10 | 4756006 john39
john39's picture

they rely on the fact that most people can't go to antarctic to check for themselves... and know that all the big media could never be in on a lie so big...  but you know what goebbels said about the size of lies...

Tue, 05/13/2014 - 15:25 | 4756055 lasvegaspersona
lasvegaspersona's picture





burn him...he's a witch

Tue, 05/13/2014 - 15:37 | 4756106 ZerOhead
ZerOhead's picture

"burn him...he's a witch"

That would only serve to make global warming even more catastrophic than it already is...

Tue, 05/13/2014 - 14:41 | 4755899 Groundhog Day
Groundhog Day's picture

So if we have a cooler summer, it will cost me less to cool my house and save me money so i will turn around and spend less?  I just want to get my talking points straight with the economists i come accross

Tue, 05/13/2014 - 14:52 | 4755949 john39
john39's picture

and people don't go out and shop, or go out to eat because its not hot and miserable out...  oh wait.  maybe they mean people don't shop online because they are busy outside enjoying the nice weather?  it all gets so confusing.

Tue, 05/13/2014 - 15:06 | 4755987 Headbanger
Headbanger's picture

No no no... It's that horrible "Global Darkness"  that happens every day that's the problem and we have GOT to make it stop or it will be dark all the time!

Why people can hardly see in it and so no wonder they can't spend spend spend round the click like they should be doing.

So please, start conserving daylight as much as you can, any way you can to stop this terrible threat to life on Earth!

Tue, 05/13/2014 - 14:32 | 4755856 Stoploss
Stoploss's picture


Tue, 05/13/2014 - 16:05 | 4756224 caShOnlY
caShOnlY's picture

“We can’t rule out the potential that the El Nino this summer causes unexpected damage to Japan’s economy,”

Ho Li Fuk, scraping the bottom for excuses.  This puppy has got to be real close to blowing.  Never in my life has weather, other than disastrous, been used as a scapegoat for economics.

Tue, 05/13/2014 - 14:36 | 4755872 Osmium
Osmium's picture

I did not need to see that

Tue, 05/13/2014 - 19:53 | 4757077 Redneck Hippy
Redneck Hippy's picture

There are some things that, once seen, can not be un-seen, ever.

Tue, 05/13/2014 - 14:30 | 4755843 kchrisc
kchrisc's picture

Send Seal Team-6, oops, 7, to take out this El Nino guy. That'll fix it.

Tue, 05/13/2014 - 14:30 | 4755845 Dr. Engali
Dr. Engali's picture

Damn weather! Whose idea was it to invent that crap anyway?

Tue, 05/13/2014 - 14:39 | 4755890 101 years and c...
101 years and counting's picture

someone's excel file is corrupted and the wrong weather is going to the wrong regions of the centrally planned world.

Tue, 05/13/2014 - 14:47 | 4755925 EllaDara
EllaDara's picture

Don’t knock the weather; nine-tenths of the people couldn’t start a conversation if it didn’t change once in a while. ~Kin Hubbard

Tue, 05/13/2014 - 14:55 | 4755957 BeerMe
BeerMe's picture

Haha!  I was just thinking about that.  What else can we use?

Tue, 05/13/2014 - 14:31 | 4755850 beavertails
beavertails's picture

Next up, all the central banks and investment houses will start issuing economic forecasts based on weather forecasts, ignoring debt levels as the number one drag on the global economies.

Tue, 05/13/2014 - 14:32 | 4755853 Fuh Querada
Fuh Querada's picture

I thought Japanese women were frigid enough to begin with.

Tue, 05/13/2014 - 14:35 | 4755870 FredFlintstone
FredFlintstone's picture

Not from what I see on the internet.

Tue, 05/13/2014 - 14:41 | 4755891 GooseShtepping Moron
GooseShtepping Moron's picture

That joke touches upon the real issue: There are not enough Japanese.

There is no way to grow an economy when the population is both aging and shrinking in absolute terms. The very best thing that Japan can do to help itself is to start making babies. You would think a national policy of "getting your freak-on-omics" would find at least a few takers, but apparently not. In the absence of that expedient, Japan's only hope is to shut out the world and go Tokugawa all over again.

Tue, 05/13/2014 - 14:42 | 4755901 pods
pods's picture

They have engineers working on making a life size and fertile Japanese fuck doll, so things might be turning around.


Tue, 05/13/2014 - 14:56 | 4755965 agstacks
agstacks's picture

hmmm, link?


Tue, 05/13/2014 - 14:32 | 4755857 pods
pods's picture

El Nino =~1% drop in GDP?



Tue, 05/13/2014 - 15:06 | 4755986 espirit
espirit's picture

Nuclear Winter =~2% rise in GDP.

Didn't see that one coming.

Global Warming Solved!

Tue, 05/13/2014 - 14:38 | 4755864 Smegley Wanxalot
Smegley Wanxalot's picture

Other than max a week, or a couple days, does anyone know of anybody boycotting purchases due to weather?  Seriously?

"I don't need new shoes.  It's cold out."

"I don't need new clothes.  It's cold out."

"I don't need food.  It's cold out."


More like "I'm cutting spending.  It's all a fucking scam."

Tue, 05/13/2014 - 14:34 | 4755867 JJdog
JJdog's picture

Japanese government are the biggest scams on this planet! Shithole Abe is the head of the scam! 

Tue, 05/13/2014 - 14:37 | 4755883 firstdivision
firstdivision's picture

It's a shame that the Japanese populace is about as brainwashed as NRK citizens in their belief that the governement has their best interest at the heart of all their decision making.  If they ever wake up from being comatose, there would be riots of citizens demanding the heads of government commit seppuku

Tue, 05/13/2014 - 16:26 | 4756321 JJdog
JJdog's picture

radiation sushi kept them stupid

Tue, 05/13/2014 - 14:36 | 4755876 Theta_Burn
Theta_Burn's picture

Ninja like discipline those Japanese

Who else could pull this off...with a straight face

Tue, 05/13/2014 - 14:37 | 4755879 PlusTic
PlusTic's picture

Global co-ordinated Central Bankster Suicide would seem more appropriate...

Tue, 05/13/2014 - 14:37 | 4755881 starman
starman's picture

I can hear you but I'm no longer listening to bullshit!

Tue, 05/13/2014 - 14:38 | 4755886 Bunga Bunga
Bunga Bunga's picture

Why not Boko Haram?

Tue, 05/13/2014 - 14:38 | 4755887 Madcow
Madcow's picture

The Japanese economy is imploding becuase:

a) ongoing defaltionary collapse now aggravated by tax increases


b) the snow from the Winter of 13-14 was epic, and just now beginning to melt here in May - worldwide

Tue, 05/13/2014 - 14:49 | 4755939 CrashisOptimistic
CrashisOptimistic's picture

3) Paying $109 Brent/barrel for 5 million barrels of the good stuff every single day.

Tue, 05/13/2014 - 14:44 | 4755913 Eurodollar
Eurodollar's picture

The whole world has downs, send in the clowns. If that doesnt work, send in the BOJ, the FED or the English Central Bank. The shit has hit the fan, and its about to get ugly. Japan's welfare experiment is just also showing us what will happen to the entire western world. Nothing can stop the cathastrophy either. No one wants to. While you wait, you'd be smart trying to acquire some real assets. GL

Tue, 05/13/2014 - 17:41 | 4756560 SDShack
SDShack's picture

Yep, Drone On Dude!.

Tue, 05/13/2014 - 14:45 | 4755916 firstdivision
firstdivision's picture

Buying VIX hand-over fist time.  This shit has hit bottom.

Tue, 05/13/2014 - 14:49 | 4755935 fonzannoon
Tue, 05/13/2014 - 14:54 | 4755954 firstdivision
firstdivision's picture

If only I could short the intelligence of the people that will get involved in these ETFs, I'd own all the gold/oil/ng in the world.

Tue, 05/13/2014 - 14:51 | 4755932 cowdiddly
cowdiddly's picture

Yellen Smellin

The Weather Channel is calling for Partly cloudy and at least 20pips on the Sp next week.

Allthough I admit, I get most of my investment advice from Accuweather.

Tue, 05/13/2014 - 14:51 | 4755945 Freedumb
Freedumb's picture

Maybe trading on barometric data will get me better returns, because trading on anything produced by an analyst or accountant these days is getting me nowhere

Tue, 05/13/2014 - 14:51 | 4755946 lasvegaspersona
lasvegaspersona's picture

because everyone was planning to skip the Riviera this year and hit the beaches at Fukushima...?


Everyday I awake in wonder at the lies needed to keep the system supported.

Tue, 05/13/2014 - 14:56 | 4755956 CrashisOptimistic
CrashisOptimistic's picture

I just added it up.

5 million barrels/day at $109 Brent/barrel adds up to about $200 billion / year that leaves Japan.

The GDP is about 6 Trillion.  So oil is 3.3% drag on GDP every single day of every single year. 

They have to grow 4% just to offset oil.

They are truly fucked.  Scarcity drives up that price, it gets worse and worse.

Tue, 05/13/2014 - 15:36 | 4756103 lasvegaspersona
lasvegaspersona's picture


Kyle Bass has a big payday coming, he saw this 4 years ago.

Sometimes being too early with a good idea can break your bank. If you approach things with caution you could become a beneficiary of the insanity rather than just one of the billion victims.

Tue, 05/13/2014 - 14:56 | 4755960 Save_America1st
Save_America1st's picture

Jebus H Fucking Krugman...I can't believe this entire world is run by a such a bunch of total fucking sociopathic pussies.  Every fucking country...every fucking central bank, and all the little fucking pussies that orbit around them. 

The weather caused it.  it's always the fucking weather.  It's sun spots, it's a polar fucking vortex.'s not any of that's these assholes fucking everything up, that's what it is.

These criminal fuck-tards are so delusional and disconnected from reality that we'd have a better chace at a recovery if Charles Manson and Hannibal fucking Lecter were running things.

Worst fucking part is that if you sent Jay Leno out to do a little "Jay Walking" skit asking the sheeple if the bad economy is caused by the weather, those fucking idiots would all fucking say YES!!!

Ask any of them if they own even 1 single fucking ounce of silver and I'm sure the answers would range from, "I like ice cream" to "oooooh...pretty color, silver." or "uh-oh....I think I just poo'd in my pants again...hee hee hee."  While they drool all over themselves...




Tue, 05/13/2014 - 14:56 | 4755964 scubapro
scubapro's picture


amazing, not really though when you think about it.   bad weather to blame for slow us activity in the winter, too pleasant of 'expected' weather to pre-slow japanese growth.  so its the expectation of nice weather that will prevent people from spending now or planning on spending in the future.

they truly do read from the book of Krugman... 'growth shall be result only from destruction; and destruction giveth thee growth.  thine growth shall be born from new fiat to replace that which has already existed'

Tue, 05/13/2014 - 15:00 | 4755972 scubapro
scubapro's picture



To All the Banquet Servers,  Valets, restroom attendants, and various hotel staff:   Do Your Part! And Disrupt, Discard, Delay, and Deter any of these fks and entrourage when you see them at your hotel.   You Know you weild the power to make things disappear and for food to not sit so pleasantly inthe bellies of the beasts.

Tue, 05/13/2014 - 15:05 | 4755984 Stuck on Zero
Stuck on Zero's picture

Hannibal blamed the weather. Napoleon blamed the weather. Hitler blamed the weather. Obama blamed the weather ...


Tue, 05/13/2014 - 15:22 | 4756041 elegance
elegance's picture

Four mortal enemies of comunism: Spring, Summer, Autumn, Winter. Or so the joke went in comunist Eastern Europe. I never thought I will see it being applicable to the western world but it happened. The joke now does work equally well. 

Tue, 05/13/2014 - 16:28 | 4756331 Stuck on Zero
Stuck on Zero's picture

I love it.

Tue, 05/13/2014 - 15:06 | 4755989 Spungo
Spungo's picture

"Other than max a week, or a couple days, does anyone know of anybody boycotting purchases due to weather?  Seriously?"

Cold mostly affects impulse purchases like food. I've worked in fast food before and very few people came in when it was cold. Real estate is affected by winter every year. This is why housing prices usually peak in summer and bottom in winter. I was reading through the yearly financial reports of a few apartment REITs, and several of them mentioned that Q4 is generally a bad quarter with fewer tenants moving in, and the data from previous years supported this claim. 

The real killer is snow fall. Lots of people stay home if roads are not plowed. 

Tue, 05/13/2014 - 15:32 | 4756082 lasvegaspersona
lasvegaspersona's picture


you are thinking this through using reason, that will never get you to the right answer.

Tue, 05/13/2014 - 15:23 | 4756045 yogibear
yogibear's picture

Ship all your jobs to China and play the Federal Reserve's game of loading up with debt is a sure way to destroy yourself. 

Let's see Japan go down the debt black hole first and the US can follow.

Tue, 05/13/2014 - 15:24 | 4756051 Solomon the KING
Solomon the KING's picture

My dog ate my homework.

Tue, 05/13/2014 - 15:26 | 4756059 magnumpk
magnumpk's picture

Where I am right now it is 10 degress below normal and the streets, shops and business offices are fucking empty.  Wait, no they're not.

Tue, 05/13/2014 - 15:29 | 4756071 lasvegaspersona
lasvegaspersona's picture

somehow this would all be more palatible if they just said: we are your master overlords, we control everything, bow before us or we will kill you...

that I could understand, they fact that can't bring themselves to say this is a sign of weakness which I find hard to a master overlord that is...

Tue, 05/13/2014 - 15:34 | 4756089 Yancey Ward
Yancey Ward's picture

The world has shifted into full retard mode.

Tue, 05/13/2014 - 15:46 | 4756132 Atomizer
Atomizer's picture

Johnny Sokko has befriended Janet Yellen on facebook & Twitter.

Tue, 05/13/2014 - 16:07 | 4756232 MillionDollarBoner_
MillionDollarBoner_'s picture

"according to people familiar with the matter."

For fuck's sake, Bloomberg! "Familiar with the matter?" What...Economics? Weather? We are all fucking "familiar" with the weather....

Fucking RETARDS!!!

Tue, 05/13/2014 - 16:47 | 4756390 Magooo
Magooo's picture


According to the results of a quantitative exercise carried out by the IEA in collaboration with the OECD Economics Department and with the assistance of the International Monetary Fund Research Department, a sustained $10 per barrel increase in oil prices from $25 to $35 would result in the OECD as a whole losing 0.4% of GDP in the first and second years of higher prices.


So what might a multi-year $100+ price do to growth?  


There you have it people - QE and ZIRP are all about delaying the end of growth and the collapse of civilization.


So no need to spew vomit endlessly on these forums - I have told you what the problem is --- enjoy life while you still can -- because even if you were starving in a somalian refuge camp --- that will look like prosperity when the shit hits the fan.

Tue, 05/13/2014 - 17:29 | 4756524 pashley1411
pashley1411's picture

You know, in a more religious age, like very recently, rulers found it very useful to blame "God", or whatever deity was on the pedestal at the moment, for misfortune, both natural and man-made.

Methinx blaming "God" will make a real come-back.  Out of popular demand.

Tue, 05/13/2014 - 21:36 | 4757399 Jack Burton
Jack Burton's picture

Be prepared, if the El Nino continues to form, and it looks better than even that it will, then all kinds of economic shortcomings will be blamed on the extreme weather related to El Nino. Perhaps this will be a super El Nino, that is what appears to be forming, but that is not a sure bet. A strong El Nino or Super El Nino has a series of predictable and unpredicatable influences on weather. Californina is an interesting case. California is having more unseasonable heat and drought even now, fires are buring too, earlier than usual.

SHould a strong El Nino develop by late summer, fall and into winter, then a good chance exists that California will be ground zero for numerous heavy rainfall events, even record rainfall, the kind that may end the drought, but raise all hell with the state. Agriculture will go from lack of rain, to being washed into the sea by epic Pacific storms, including a special kind of Pacific event in which moisture flows in from the Pacific, warm moist air saturated with rainfall ready to drop on California for days, even weeks on end. I give a strong El Nino a 65% chance of being here soon, if the preconditions we see now hold up, then a much stronger than normal El Nino could cause massive agricultural losses in many nations, Australia too could be devestated. One thing is a given, large food price inflation, this feed into social instablity in many poor nations, and social stress even in 1st world nations, The UK could see a large population under real economic stress due to rising food prices and the Ukraine situation could also result in soaring gas prices in Europe. The two combined could cause riots in the UK, look for those in August if things go the way I think they might.

Wed, 05/14/2014 - 01:35 | 4757938 The Blank Stare
The Blank Stare's picture

It is fucking unbearably hot and humid in Japan in the summer. The frugal Japanese housewives won't run the air conditioner all day, so instead, they go shopping. 

A cooler summer might mean a drop in electicity use as well, unless the frugal Japanese housewives decide to run their vibrators all day.

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