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Game Over Abenomics: "This Week Japan Will Acknowledge It Is In Recession", Goldman Reveals

Tyler Durden's picture




 

We have been waiting for this particular bolded sentence ever since we predicted it would take place back in December 2012 when a bunch of Keynesians, a disgraced former/current prime minister with a diarrhea problem and, of course, the Goldman Sachs' corner suite, first unleashed Abenomics.

From Goldman's Naohiko Baba, previewing this week's key Japanese economic events

The Cabinet Office makes an assessment of the state of the economy based on the trend in the coincident CI, using a set of objective criteria. The August coincident CI is set to print negative mom. In this case, the Cabinet Office’s economic assessment will likely shift downward to “signaling a possible turning point” from the current level of “weakening”. According to the Cabinet Office, such a change in assessment provisionally indicates a likelihood that the economy has already fallen into recession. This is effectively akin to the government acknowledging that the economy is in recession.

And because every Keynesian lunacy has to end some time, RIP Abenomics: December 2012 - October 2014.

 

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Sun, 10/05/2014 - 20:08 | 5292350 williambanzai7
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QE-Kiri time?

Sun, 10/05/2014 - 20:20 | 5292389 junction
junction's picture

It is all too confusing for me.  When I think of Japan these days, I think of the Daiichi Fukushima meltdown and that great fight scene at the end of "Blood On The Sun" (1945), where James Cagney's character, reporter Nick Condon, squares off against the evil Captain Oshima (played by real life judo champion Jack Sergel, a former LAPD sargeant, whose screen monniker was John Halloran).  What a fight, decades ahead of its time.  

Sun, 10/05/2014 - 20:27 | 5292427 knukles
knukles's picture

Wait a minute. 
They been sayin' that everything's all OK, growth is just around the corner we just went around, again.
Damn, I'm not gonna give them but a few more chances to convince me.

Mon, 10/06/2014 - 00:36 | 5293234 TruthInSunshine
TruthInSunshine's picture

Paul Krugman just wrote the other day that Japan needs to more quickly debauch its currency, go even more deeply into further debt faster, and destroy the collective savings (whatever remains) of its people more efficiently if it hopes to turn things around.

Krugmanomics FTL.

I guarantee anything that Krugman would view a major global war resulting in the death hundreds of millions as a positive, stimulating and "good" development.

Mon, 10/06/2014 - 04:03 | 5293416 Manthong
Manthong's picture

Does anybody over here realize how tasty fresh housecat tartar morsels on watercress with wasabi is?

Mon, 10/06/2014 - 04:29 | 5293433 Manthong
Manthong's picture

OK, OK.. so I am a sick puppy and this probably will zing over most folks heads.

..but I almost spit laughing over all the monitors after writing it.

..maybe something about being there decades ago..

 

Sun, 10/05/2014 - 20:29 | 5292432 bigrooster
bigrooster's picture

Opinions please.  Does this make the dollar stronger and gold/silver weaker?  It seems to me that silver is heading to $15 for support.  I really want to buy some but it seems that there is no support yet.

Sun, 10/05/2014 - 20:34 | 5292458 Philo Beddoe
Philo Beddoe's picture

There is no support. Granny has a crutch and there are no markets.  

I own Silver but I am also a realist. A sad fucking realist. 

Sun, 10/05/2014 - 20:34 | 5292460 fed_depression
fed_depression's picture

Gold and silver are worthless as there is no one with money that can buy them long term. This is the why the prices are falling.

Sun, 10/05/2014 - 21:19 | 5292598 himaroid
himaroid's picture

Don't go all in on precious until you see the markets beginning to crash. But it would be wise to keep picking up a little all along.

There are many other non financial assets that you should be buying right now.

Sun, 10/05/2014 - 21:46 | 5292687 Bangin7GramRocks
Bangin7GramRocks's picture

"We are here to announce that our economy is in a recession", clears throat and whispers sofly off microphone "and our entire country will die a horrific death from radiation poisoning.' 

Sun, 10/05/2014 - 20:11 | 5292360 ramacers
ramacers's picture

... and the dominoes ?

Sun, 10/05/2014 - 20:22 | 5292403 AdvancingTime
AdvancingTime's picture

Fallout should be expected, this may hit faith in currencies in a big way. Currencies are IOUs, glorified and pretty pieces of paper printed and handed out by governments. Whether because of modern printing options or in an effort to thwart counterfeiters most of us will admit countries have raised the bar concerning the appearance of their currency, but that does not change their value.

This has almost become a full blown beauty contest and taken our minds off what is really behind these pretty little tokens. A piece of paper with great power, based only on faith, they are mere promises of stored value and wealth, and the value of these promises can change in an instant. With this in mind currencies may not be the best place to store your wealth. The article below delves deeper into currencies as a great "Trojan horse" for governments to fleece the average citizen of their wealth.

 http://brucewilds.blogspot.com/2014/10/currencies-are-ious.html

 

Sun, 10/05/2014 - 20:35 | 5292461 Greenskeeper_Carl
Greenskeeper_Carl's picture

"This may hit faith in fiat currencies in a big way"

I doubt it. People are stupid, the only ones who will think of this as further evidence fiat currencies cannot be trusted are people like us who already think that way. This may lead to a lose of faith in the yen(its shocking to me that anyone still has any faith in it anyway), but it will probably lead to a 'flight to safety' to the USD. Not gold or anything like that. As of right now, there is no credible alternative fiat currency to the dollar.

Sun, 10/05/2014 - 20:57 | 5292536 NoDebt
NoDebt's picture

Agreed on all points.

For any sharpies who are about to post the word "BitCoin" in response, you can stow that shit.  It ain't the answer.

Sun, 10/05/2014 - 21:27 | 5292625 QEternity
QEternity's picture

Bitcoin boys are fucked when the power goes out

Mon, 10/06/2014 - 05:42 | 5293473 barre-de-rire
barre-de-rire's picture

sooooooooooooooooooooo fucking agreeee !!!!!!!!

 

total blackout off grid is THE solution to enlighten the REEL world.

Mon, 10/06/2014 - 06:25 | 5293491 TheSecondLaw
TheSecondLaw's picture

We're all fucked when the power goes out. Not being able to use bitcoins would be the least of our problems.

Sun, 10/05/2014 - 20:42 | 5292494 fed_depression
fed_depression's picture

Not with currency swaps. Yen should be down 2% right now but it's not because of the swaps. People will learn to ignore currency prices going forward as they are all rigged.

Sun, 10/05/2014 - 20:11 | 5292362 homiegot
Sun, 10/05/2014 - 20:12 | 5292363 Cautiously Pess...
Cautiously Pessimistic's picture

Fall down seven times, get up eight.

Old Japanese Proverb

Sun, 10/05/2014 - 21:19 | 5292585 robertocarlos
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Et si tu tombes 7 fois

Toujours se relever 8

Mylene Farmer

Mon, 10/06/2014 - 01:38 | 5293326 PT
PT's picture

Fall down 100 000 times, get up 100 001. Fall down for 100 001st time ... into open casket.  Never get up again.  Spent whole life getting up and falling down again.

PT

Sun, 10/05/2014 - 20:13 | 5292365 NoDebt
NoDebt's picture

I didn't think I would live long enough to see the next officially-declared recession.  I could still croak in the next few days, I suppose.

Fortunately, it will be in Japan.  That could never happen here.

Sun, 10/05/2014 - 20:24 | 5292415 homiegot
homiegot's picture

Neither could ebola. Our president said so.

Sun, 10/05/2014 - 20:45 | 5292430 knukles
knukles's picture

Dat bekuz we be excepshunul, mothafuckahs.  Ray Rice, he shows dat bitch howsza behaves.

 

Yes, my friends, the very fabric of society has come unravelled.

Sun, 10/05/2014 - 20:14 | 5292372 buzzsaw99
buzzsaw99's picture

that means they have been in a depression for awhile then

Sun, 10/05/2014 - 20:18 | 5292382 NoDebt
NoDebt's picture

About 25 years, yeah.

Sun, 10/05/2014 - 20:17 | 5292374 LetThemEatRand
LetThemEatRand's picture

The Japanese will never learn.  Don't.  Eat.  The.  Blowfish.

Sun, 10/05/2014 - 20:16 | 5292375 Cognitive Dissonance
Cognitive Dissonance's picture

Just another reason to print MOAR.

Sun, 10/05/2014 - 20:17 | 5292384 XitSam
XitSam's picture

Hai! Moar Abe! 

Sun, 10/05/2014 - 20:45 | 5292445 knukles
knukles's picture

Methinks if we add up the percentage approval ratings of Obie, Abie and Davie, it'd still be less than the combined IQ of my two Schnauzers.

Sun, 10/05/2014 - 20:17 | 5292380 AdvancingTime
AdvancingTime's picture

 It is clear that the prospects for Japan are lousy. The writing is on the wall. Japan is facing a wall of debt that can only be addressed by printing more money and debasing their currency. This means paying off their debt with worthless yen where possible and in many cases defaulting on promises made. Japan's public debt, which stands at around 230% of its GDP and is the highest in the industrialized world.

The moment the Japaneses stock market fails to rise enough to offset inflation and realizes even a weaker yen will not help we will see a tsunami of money fleeing Japan. This will constitute the end of the line for those left holding both JGBs and the yen. This has been a long time coming and I contend the cross-border flow of money leaving Japan is why some stock markets have remained so resilient . When Japan crumbles it will be felt across the world and hopefully end some of the worlds bad money policies. More on this subject in the article below.

http://brucewilds.blogspot.com/2014/05/japan-sliding-towards-abyss.html

Sun, 10/05/2014 - 20:54 | 5292524 disabledvet
disabledvet's picture

This is the stuff wars are made of.

And seems to me We the People are simply being left clueless.

We're gonna have an election on an economy? How about identity theft? "Because I want to see you die on my I-phone phucker"?

I mean seriously...do we even have the idea of Government here?

Anyone?

Sun, 10/05/2014 - 20:59 | 5292547 NoDebt
NoDebt's picture

If it was important they sure as hell wouldn't trust it to an election.

Sun, 10/05/2014 - 20:20 | 5292395 KnuckleDragger-X
KnuckleDragger-X's picture

They are circling the toilet at a high rate of speed but I'm willing to bet they won't actually admit they screwed the pooch badly and they are not going to lose face in public. They might however put up a half-assed fix to avoid reality a little longer.

Sun, 10/05/2014 - 20:24 | 5292419 homiegot
homiegot's picture

Floaters take a few times to flush.

Sun, 10/05/2014 - 20:22 | 5292408 44MagnumPrepper
44MagnumPrepper's picture

Nikkei 225 opens at 160+ in the positive for them tonight.  Looks like Japan doesn't care how bad it is...

Sun, 10/05/2014 - 20:30 | 5292438 Seasmoke
Seasmoke's picture

Golden !

Sun, 10/05/2014 - 20:31 | 5292446 Seasmoke
Seasmoke's picture

Fool me once , shame on Abe .......Fool me 20 times, shame on Bernanke

Sun, 10/05/2014 - 20:32 | 5292449 q99x2
q99x2's picture

Destroyed by a double wammy typhoon. Goldman Sachs and the weather.

Sun, 10/05/2014 - 20:44 | 5292496 himaroid
himaroid's picture

Did not Kyle Bass say when this happens, could cause a major run to U.S. bonds?

Oh boy.

Sun, 10/05/2014 - 21:09 | 5292571 Amerikan Patriot
Amerikan Patriot's picture

Yep.  My recollection is that Kyle Bass predicted Japan would blow up by the beginning of 2015.  He might not be far off.  Imagine the tremors a Yen failure will have on fiat currencies generally.  Folks can't dismiss it like they did in lesser third world economies.  Japan is firmly first world.  The future implications for the dollar are daunting.

Sun, 10/05/2014 - 23:05 | 5292995 Wild Theories
Wild Theories's picture

what makes you think the Japanese aren't in US bonds already?

GPIF has been divesting its investments including into US based assets for much of the year already

and reports from right here on ZH tells us bids at japanese bond auctions are at record lows, japanese money have already deserted their own paper

 

and Jim Grant's other article 1 page back says he's scratching his head at who would piling into US bonds based on an inflating currency, ha, the Japanese that's who, they still get the carry return from USD/Yen even at low yields.

Sun, 10/05/2014 - 21:07 | 5292559 disabledvet
disabledvet's picture

Well...his nickel trade is getting annihilated so maybe we could start there.

The book has already been written folks: "Greenspan's Legacy of Debt." 2008. Stay liquid...stay smart. "The media has everything under control." Just follow the camera....

Sun, 10/05/2014 - 21:21 | 5292606 ekm1
ekm1's picture

My forecast of minus 5% of Japan GDP made in Jan 2014 is now fulfilled and exceeded

Japanese seems to have the habit of manipulating their data only a little

Sun, 10/05/2014 - 21:47 | 5292700 Chuck Knoblauch
Chuck Knoblauch's picture

It's rigged to go up until it's rigged to go down.

Sun, 10/05/2014 - 22:26 | 5292849 stpioc
stpioc's picture

If Japan does enter a recession, by no means certain at this stage, it's due to the sales tax hike in April. How Keynesian is that?

Sun, 10/05/2014 - 22:28 | 5292852 yogibear
yogibear's picture

Too bad Paulson bailed out his buddies at Goldman.

Goldman is doing the fallen angle's work again.

Mon, 10/06/2014 - 06:37 | 5293502 The Blank Stare
The Blank Stare's picture

The major coffee bean importer in Japan said they are raising their import costs bye 25% in November. Vending machine boys are gonna be busy changing the prices on that shitty can coffee.

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